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Seasonal Trades

  #51 (permalink)
 Futuresnoob 
San Antonio Texas
 
Experience: Intermediate
Platform: Sierra Charts, TOS
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I got killed in RBOB today. Does any have any good resources on learning to truly read the EIA report? I want to really learn to trade every markets, but I've paid for my fair share of half ass classes or the next best and greatest indicators. I don't mind doing the work or the reading if someone has a book that has added to their skill set.

Thanks all,

Jason

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  #52 (permalink)
 ron99 
Cleveland, OH
 
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ron99 View Post
Bought this position back today at 0.2335. Loss of $46.20. I should have exited on Friday.

Bought one of these spreads at 0.2335 to hold until Feb 24th.

Exited 2/23 at 0.2202 for a $558.60 loss. Reduced US gasoline demand is causing RB to drop and not follow seasonals.


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  #53 (permalink)
 ron99 
Cleveland, OH
 
Experience: Advanced
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Futuresnoob View Post
I got killed in RBOB today. Does any have any good resources on learning to truly read the EIA report? I want to really learn to trade every markets, but I've paid for my fair share of half ass classes or the next best and greatest indicators. I don't mind doing the work or the reading if someone has a book that has added to their skill set.

Thanks all,

Jason

This is from CME covering the basics. It is just OK.
Gas Prices Explained - Futures Fundamentals

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  #54 (permalink)
 
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 SMCJB 
Houston TX
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Futuresnoob View Post
I got killed in RBOB today. Does any have any good resources on learning to truly read the EIA report? I want to really learn to trade every markets, but I've paid for my fair share of half ass classes or the next best and greatest indicators. I don't mind doing the work or the reading if someone has a book that has added to their skill set.

I trade very little RBOB (but I did once work in a Gasoline blending group) and don't know whats happening right now, but let me add a couple of things to the conversation.
  • First RBOB is a derivative of crude oil, and crude oil is a much much bigger market. As such you could be in a situation where crude is going up 50c/bbl/day and RBOB is going up 1c/Gal/day (42c/bbl). On a chart this would look like RBOB is in a bullish trend. But in reality RBOB is bearish vs crude oil, but crude oil's bullish trend is overriding RBOB's bearish trend. If you plotted the RBOB Crack (RB * 42 - CL) you would see a Bearish trend. Saying that this isn't what appears to have happened the last few days - but something to consider when trading RB or HO outright from a fundamental perspective.
  • RBOB has different summer specs than it does winter specs. Specifically the required Reid Vapor Pressure ("RVP") is lower in the summer. In the winter you want a high RVP so when it's cold your car will still start, but in the summer you want a lower RVP to avoid your RBOB evaporating on hot days! The required RVP of March RBOB is 13.5, while RVP of April is 9.0. As such the March product you were trading last week, and the April product you are trading this week are different products. One obvious implication of this, is that the EIA don't publish separate stock levels for each specification. As you can imagine 22kkb of RBOB when 10kkb is winter spec, and 12kkb is summer spec, is very different than 22kkb of RBOB when 5kkb is winter spec, and 17kkb is summer spec! On a final note, I know its relatively easy to increase the RVP (add Butane) but don't think it's as easy to decrease it, hence the March-April spec change is more drastic than the Sep-Oct one.

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  #55 (permalink)
 
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 SMCJB 
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ron99 View Post
This is from CME covering the basics. It is just OK.
Gas Prices Explained - Futures Fundamentals

A good (and surprisingly easy) read for any aspiring energy trader is Petroleum Refining for the Non-Technical Person.
2nd Edition is quite a bit cheaper than the 3rd Edition but not sure how different they can be.

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  #56 (permalink)
 Futuresnoob 
San Antonio Texas
 
Experience: Intermediate
Platform: Sierra Charts, TOS
Broker: Edge Clear, Rithmic
Trading: ES and Treasury Spreads
Posts: 102 since Nov 2016
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Thank you both for the help. SMCJB I ordered the third edition. Thank you again.

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  #57 (permalink)
 
SMCJB's Avatar
 SMCJB 
Houston TX
Legendary Market Wizard
 
Experience: Advanced
Platform: TT and Stellar
Broker: Advantage Futures
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Frequency: Many times daily
Duration: Never
Posts: 5,048 since Dec 2013
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Futuresnoob View Post
I got killed in RBOB today. Does any have any good resources on learning to truly read the EIA report? I want to really learn to trade every markets, but I've paid for my fair share of half ass classes or the next best and greatest indicators.

I'm hearing that a major factor behind the RBOB drop is a significant drop in the prices of RINS or "renewable identification numbers". Not sure exactly how this works but apparently its got something to do with the renewables that they blend into gasoline.

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  #58 (permalink)
 Futuresnoob 
San Antonio Texas
 
Experience: Intermediate
Platform: Sierra Charts, TOS
Broker: Edge Clear, Rithmic
Trading: ES and Treasury Spreads
Posts: 102 since Nov 2016
Thanks Given: 50
Thanks Received: 55


SMCJB View Post
I'm hearing that a major factor behind the RBOB drop is a significant drop in the prices of RINS or "renewable identification numbers". Not sure exactly how this works but apparently its got something to do with the renewables that they blend into gasoline.

Where do you go for fast energy news? I still haven't seen anything on why RBOB dropped.

Jason

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  #59 (permalink)
 
SMCJB's Avatar
 SMCJB 
Houston TX
Legendary Market Wizard
 
Experience: Advanced
Platform: TT and Stellar
Broker: Advantage Futures
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,048 since Dec 2013
Thanks Given: 4,384
Thanks Received: 10,205


Futuresnoob View Post
Where do you go for fast energy news? I still haven't seen anything on why RBOB dropped.
Jason

I asked a couple of traders at larger trading shops, and a couple of OTC brokers what was driving RBOBs drop. Two of the four came back and said RINS.

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  #60 (permalink)
 Futuresnoob 
San Antonio Texas
 
Experience: Intermediate
Platform: Sierra Charts, TOS
Broker: Edge Clear, Rithmic
Trading: ES and Treasury Spreads
Posts: 102 since Nov 2016
Thanks Given: 50
Thanks Received: 55


Agrimoney.com | US biofuel rumours send grains prices on a dizzy ride

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