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Interesting chart of recent gasoil (diesel) calendar spreads


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Interesting chart of recent gasoil (diesel) calendar spreads

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 vmodus 
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I do not trade calendar spreads, though I know some people here do. One of the professionals I follow on Twitter posted this interesting daily chart on the gasoil fuel calendar spreads:



Source:


Thought I would share in case anyone was interested in this.

~vmodus

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 Hulk 
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vmodus View Post
I do not trade calendar spreads, though I know some people here do. One of the professionals I follow on Twitter posted this interesting daily chart on the gasoil fuel calendar spreads:



Source:


Thought I would share in case anyone was interested in this.

Gasoil is where the puke all began. It was expiration time and all of a sudden, there were no buyers and everybody was long. The move in Gasoil was extraordinary. The front spread dropped an HO equivalent of about 70-75cpg from the highs (I dont remember exactly). It cascaded everywhere, HO front spread move was about 23cpg from the highs. Just to put this in the right perspective, generally, the HO front spread moves 20-30 points in a day - thats 0.2-0.3cpg. Basically, the market was looking for bids and sold whatever it could find.

I will never forget this day because yours truly was long and by a large margin, this is the biggest hit I have taken. I was also long HO outright. That move was approx $1.25 from high to low. And this is a market that ranges 4-5cpg/day. This was a day when my thoughts went from "Ok, looks like I will make less than I thought" to "Holy shit! wtf just happened!".

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 vmodus 
Somewhere, Delaware, USA
 
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Hulk View Post
Gasoil is where the puke all began. It was expiration time and all of a sudden, there were no buyers and everybody was long. The move in Gasoil was extraordinary. The front spread dropped an HO equivalent of about 70-75cpg from the highs (I dont remember exactly). It cascaded everywhere, HO front spread move was about 23cpg from the highs. Just to put this in the right perspective, generally, the HO front spread moves 20-30 points in a day - thats 0.2-0.3cpg. Basically, the market was looking for bids and sold whatever it could find.

I will never forget this day because yours truly was long and by a large margin, this is the biggest hit I have taken. I was also long HO outright. That move was approx $1.25 from high to low. And this is a market that ranges 4-5cpg/day. This was a day when my thoughts went from "Ok, looks like I will make less than I thought" to "Holy shit! wtf just happened!".

Ouch, sorry to hear that. Thanks for your insight from the inside. I've read about the safety in spreads, but I guess you still have the front month to deal with at some point.

~vmodus

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 Hulk 
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vmodus View Post
Ouch, sorry to hear that. Thanks for your insight from the inside. I've read about the safety in spreads, but I guess you still have the front month to deal with at some point.

Its OK. Profiting during times like the war or natural disasters is ethically questionable anyway. Do we do our jobs as traders or sit on the sidelines out of principle? If prices are declining, I guess it would be OK but it matters even more when commodities rally to extreme prices because the public ends up paying for it.

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 vmodus 
Somewhere, Delaware, USA
 
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Hulk View Post
Its OK. Profiting during times like the war or natural disasters is ethically questionable anyway. Do we do our jobs as traders or sit on the sidelines out of principle? If prices are declining, I guess it would be OK but it matters even more when commodities rally to extreme prices because the public ends up paying for it.

I agree with your point about ethics, which came up in this episode of Top Traders Unplugged:
https://www.toptradersunplugged.com/podcast/182-systematic-investor-series-ft-rob-carver-march-6th-2022/

My trading approach is systematic, so I can only take the signals that are given by the system, and the systems run all the time. I think this approach resolves some of the ethical issues around trading. I think if I turned my systems on only during times of market upheaval, then I am probably profiting from someone else's misery and it is probably unethical, and karma should kick me in the shins. Letting my systems run continuously is analogous to running a business: if I am a medical supply manufacturer and an epidemic or pandemic hits, do I stop doing business because business is good? Food for thought.

~vmodus

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