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QU ( mini RBOB ) & QH ( mini Heating Oil ) Position Size Calculations??
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
Crude Oil "CL" is a 1000 Barrel contract, quoted in $/barrel, with tick size $0.01 which equates to $10
The eMini "QM" is a 500 Barrel contract, quoted in $/barrel, with tick size $0.025 which equates to $12.50
Heating Oil/Ultra Low Sulphur Diesel "HO" is a 42000 Gallon Contract (~1000 Barrels), quoted in $/Gallon, with tick size $0.0001 which is $4.20
The eMini "QH" is a 21000 Gallon Contract (~500 Barrels), quoted in $/Gallon, with tick size $0.001 which is $21 not $2.10
Reformulated Blendstock for Oxygenate Blending (aka RBOB Gasoline) "RB" is a 42000 Gallon Contract (~1000 Barrels), quoted in $/Gallon, with tick size $0.0001 which is $4.20
The eMini "QU" is a 21000 Gallon Contract (~500 Barrels), quoted in $/Gallon, with tick size $0.001 which is $21 not $2.10
So all your calculations are of by a factor of 10.
Please note that while QM does trade liquidly, QH and QU DO NOT TRADE. I would strongly advise against trying to trade these contracts.
SMCJB,
Thank you so much for explaining and breaking these down for me
I was definitely off on the Price per Tick, boy was I ever
Does my Position size Formula for the two Markets seem correct ( the Number of Ticks at risk, based on the Entry and stop loss for each trade )?
And thank you for advising against trading these two markets due to a lack of Liquidity - I will definitely consider not trading them due to the low Liquidity that you mentioned
My main reasoning for wanting to understand these two markets is solely due to me trying to make sure I understand all of the Future's Energy markets
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
Mathematically yes
Position Size = Account Size * 0.02 / (max loss in ticks * Dollars per tick)
is how many contracts you can trade and limit trade risk to 2%. This of course ignores, slippage and brokerage.
If you want to trade energy can I suggest the following NYMEX futures...
Crude "CL" or it's mini "QM"
Brent "BZ" (but this is far more liquid on ICE than NYMEX) [no mimi]
Natural Gas "NQ" or it's mini "QG"
Heating Oil (actually Ultra Low Sulfur Diesel) "HO" [but not its mini]
RBOB Blendstock (almost) but not not quite Gasoline) "RB" [but not its mini]
ICE also has a Low Sulfur Gasoil contract. (Unlike all the above which are 1000 barrel volumetric contracts, ICE Gasoil is a 100 Metric Tonne weight contract so the price and contract conversion to barrels or Gallons is more complicated. It's also an NW Europe barge based contract while the NYMEX HO and RB are both New York Harbor contracts).
Potential additional spread contracts are
WTI-Brent, trades on NYMEX or ICE as an implied spread.
Brent-Gasoil Crack, trades on ICE as an implied spread.
WTI-Heating Oil/Diesel Crack, trades on NYMEX as an implied spread.
WTI-RBOB Crack, trades on NYMEX as an implied spread.
Brent-Heating Oil/Diesel Crack, trades on NYMEX or ICE as an implied spread.
Brent-RBOB Crack, trades on NYMEX or ICE as an implied spread.
Gasoil-Heating Oil/Diesel Spread, trades on ICE as an implied spread.
ICE also has a bunch of products that trade on their "S2F" exchange that is actually difficult to get access to and probably out of the scope of this conversation.
SMCJB,
your depth of knowledge in the Energy markets is amazing
Thank you so much for sharing your knowledge and insight
I completely see what you mean regarding the low to pretty much non-existent volume for the mini Heating Oil and mini RBOB contracts
I've honed in on the mini Crude Oil and mini Natural Gas
Not sure where I ever got that the mini RBOB was $2.10 per Tick
Both the mini Heating Oil and mini RBOB are the same, as far as Tick value( $21 )
and that they are both - .001
I initially had mini RBOB at .0001 ( another opps ) on my part
