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Seasonal Trades


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Seasonal Trades

  #261 (permalink)
 myrrdin 
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mosalem2003 View Post
It's promising data, as if the spread long maintains for 8 weeks, we can accumulate on all the dips or discounts and build a position.

Did you try also calendar spreads for CL, NG, HO?

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I did not trade seasonal intra-commodity spreads in CL, NG, or HO recently. One other spread, I traded, was the RB-CL. It also follows the seasonal spread nicely since the end of 2020. The data related to profit / loss are similar to the RB-HO, but RB-HO looks better to me.

Best regards, Myrrdin

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  #262 (permalink)
 
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 Kruger 
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myrrdin View Post
One of the seasonal trades working well this year is the RB-HO spread. The actual chart follows the seasonal chart nicely for quite a while.

I had exited the trade using the May contracts in the end of March with a nice profit, and re-entered in the end of last week using the July contracts. On the one hand, the trade has moved rather far this year, and profit potential seems to be limited. On the other hand, vaccinations and the warmer weather in spring should reduce the risk of COVID19, and car drivers should be more active in the net couple of weeks.

This trade is among my long term favorites for many years.

Any comments are highly welcome.

Best regards, Myrrdin

I took a look at this but thought the current entry price rather on the high side, so decided to hold on to see which way it'll go. Perhaps too cautious :-)
What is your view on CL : Long Dec- Short Jul spread?
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  #263 (permalink)
 myrrdin 
Linz Austria
 
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Kruger View Post
I took a look at this but thought the current entry price rather on the high side, so decided to hold on to see which way it'll go. Perhaps too cautious :-)
What is your view on CL : Long Dec- Short Jul spread?
Thanks

Yes, I agree, the entry price for the RBN-HON is quite high. Thus, I intend to take profit rather early.

Currently, I do not want to be short CL. Thus, I do not intend to enter the CLZ-CLN.

Best regards, Myrrdin

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  #264 (permalink)
 
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 SMCJB 
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Kruger View Post
What is your view on CL : Long Dec- Short Jul spread?

What are you thinking on this?

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  #265 (permalink)
 myrrdin 
Linz Austria
 
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There is a trade suggestion of MRCI that I like: LCM-LHM from end of April until early June.

The spread only follows the seasonal chart for some weeks. But the spread is overextended to the short side - it has not been that low since early 2014. LCM changed direction with an outside day up today, and LHM is extremely overbought.

The spread worked in 13 of the most recent 15 years.

I entered this trade using short option spreads: LCQ P118-108, LHQ C110-120. This gives me the maximum profit as long as the short legs are OTM at expiry. I used the August contracts to enter at approx. 100 DTE.

Best regards, Myrrdin

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  #266 (permalink)
 myrrdin 
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myrrdin View Post
Yes, I agree, the entry price for the RBN-HON is quite high. Thus, I intend to take profit rather early.

Currently, I do not want to be short CL. Thus, I do not intend to enter the CLZ-CLN.

Best regards, Myrrdin

Stopped out of the RBN-HON with a small loss at the close.

Best regards, Myrrdin

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  #267 (permalink)
mosalem2003
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myrrdin View Post
There is a trade suggestion of MRCI that I like: LCM-LHM from end of April until early June.

The spread only follows the seasonal chart for some weeks. But the spread is overextended to the short side - it has not been that low since early 2014. LCM changed direction with an outside day up today, and LHM is extremely overbought.

The spread worked in 13 of the most recent 15 years.

I entered this trade using short option spreads: LCQ P118-108, LHQ C110-120. This gives me the maximum profit as long as the short legs are OTM at expiry. I used the August contracts to enter at approx. 100 DTE.

Best regards, Myrrdin

What is the criteria for using short option spreads than outright Futures spreads ?

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  #268 (permalink)
mosalem2003
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myrrdin View Post
Stopped out of the RBN-HON with a small loss at the close.

Best regards, Myrrdin

Is this a fixed $ stop exit ? When do you decide to exit a trade with a small loss ? I think the idea of these trades is to allow a range of drawdown until it hits target, or you treat it as any other type of trading with a fixed dollar stop ?

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  #269 (permalink)
 myrrdin 
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mosalem2003 View Post
What is the criteria for using short option spreads than outright Futures spreads ?

I prefer futures spreads in case I expect a large movement of the spread.

I prefer options in case I expect side wards or small movement.

Best regards, Myrrdin

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  #270 (permalink)
 myrrdin 
Linz Austria
 
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mosalem2003 View Post
Is this a fixed $ stop exit ? When do you decide to exit a trade with a small loss ? I think the idea of these trades is to allow a range of drawdown until it hits target, or you treat it as any other type of trading with a fixed dollar stop ?

I decide about the stop when I enter a trade. In this case I chose a narrow stop, because the spread already had moved far, and I considered the profit potential to be limited. Risk and profit potential should be in a good relation to each other. I always keep risk significantly smaller than profit potential.

Best regards, Myrrdin

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Last Updated on May 4, 2021


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