kummi90 

You trade the spreads? How do you go about that?

I trade a lot of things in a lot of markets but I'm primarily an energy trader. That way hopefully always one (or more) of them is working. Each alone is profitable, but by themselves probably couldn't justify my time and effort. Layer them on top of each other and the cumulative result is a business. In crude I trade three different strategies that are all spread, or even butterfly (spread of spreads) related. All three are what I would call relative value related. Meaning I don't think something is going up or down, I think it's cheap or expensive RELATIVE to something else. So I buy what I think is cheap and sell whatever I think its cheap relative to. (FYI In one case "think" is very rules based. In another it involves some decent math models. In the last it's more discretionary) I even spread butterflies! I do this on a portfolio basis not on a trade by trade basis. So today I might be buying AB and selling CD. Tomorrow I might be Selling AC and buying BD. Then on day 3 selling AC and buying BD. etc etc. Continual turnover of balanced positions that eventually net out. If they don't net out, I have time based stops where I exit positions at certain times before expiry.

SMCJB 

I trade a lot of things in a lot of markets but I'm primarily an energy trader. That way hopefully always one (or more) of them is working. Each alone is profitable, but by themselves probably couldn't justify my time and effort. Layer them on top of each other and the cumulative result is a business. In crude I trade three different strategies that are all spread, or even butterfly (spread of spreads) related. All three are what I would call relative value related. Meaning I don't think something is going up or down, I think it's cheap or expensive RELATIVE to something else. So I buy what I think is cheap and sell whatever I think its cheap relative to. (FYI In one case "think" is very rules based. In another it involves some decent math models. In the last it's more discretionary) I even spread butterflies! I do this on a portfolio basis not on a trade by trade basis. So today I might be buying AB and selling CD. Tomorrow I might be Selling AC and buying BD. Then on day 3 selling AC and buying BD. etc etc. Continual turnover of balanced positions that eventually net out. If they don't net out, I have time based stops where I exit positions at certain times before expiry.

Oh I see. So you trade options? Broken wing butterfly?

Wait no, right! Spreads, as in the price difference of two assets. Like /RB and /CL? Or /CL and NG? Surely, they must be correlated?

How do you, generally, determine whether or not something is cheap or expensive relative to one another?

Can you tell us more about your strategies? Maybe you have made posts before which can help?

kummi90 

Oh I see. So you trade options? Broken wing butterfly? Wait no, right! Spreads, as in the price difference of two assets. Like /RB and /CL? Or /CL and NG? Surely, they must be correlated?

Or Time Spreads. So for example CL Nov25-Dec25 vs CL Dec25-Jan26. Which would be the CL X25-Z25-F26 Butterfly or the CL X25 1 Month Butterfly.

kummi90 

How do you, generally, determine whether or not something is cheap or expensive relative to one another?

Why is CL Dec25-Jan26 trading higher than CL Nov25-Dec25?

kummi90 

Can you tell us more about your strategies? Maybe you have made posts before which can help?

There's literally 100s of posts in this one thread by me.

SMCJB 

Or Time Spreads. So for example CL Nov25-Dec25 vs CL Dec25-Jan26. Which would be the CL X25-Z25-F26 Butterfly or the CL X25 1 Month Butterfly. There's literally 100s of posts in this one thread by me.

Yeah, I looked at your profile to find your posts.

SMCJB 

Why is CL Dec25-Jan26 trading higher than CL Nov25-Dec25?

Contango?
How do you determine if the price different is right? Or low or high?

NYMEX Crude (CL) Margin changes effective Sep 11th 2024.
Non-member margins will be 110% of these margins.

Tier 1 - Oct'24 - $5200 down from $6600 (-$1400)
Tier 2 - Nov'24 - $5000 down from $6400 (-$1400)
Tier 3 - Dec'24 - $4900 down from $6350 (-$1450)
Tier 15 - Dec'25 - $3600 down from $4550 (-$950)
Tier 27 - Dec'26 - $3100 down from $3500 (-$400)

@SMCJB

Do you know why the DOM on CL always has these (2) in them? They are always on two levels, either the two offers and bids closest to the current price or they can be one off (at the 2nd/3rd closest to price).

@Adapter

I use TT and this is what I see. With TT the * means some or all of the volume at this price is "implied" meaning it's not an actual order but an implied order based upon another order in a different month combined with the calendar spread. I'm guessing the (2) you see is saying the same thing. If you further back and look at something like CL Z26 you'll probably see that the best bid and ask have this indicator, meaning the best bid and ask are implied.

kummi90 

let's say if I made 1.1k instead of losing 1.4k.

Can you guess what the key word is here in your statement? It's " if. "

It might be beneficial to you to change your psychology. Your looking too much at what you could make as opposed to what you could afford to lose. If this is " life changing money" then maybe it's time to switch to the micro's. You " MIGHT" not make as much money as you want, but you will NOT lose as much as you have been. That's what really important, the losing, not the winning. It will give you time to focus on your strategy and process thereby building your confidence in the meantime.

I just recently listened to this podcast and I thought the guest insights were really good as to what we as traders should be concentrating on, the process............not the outcome.
https://futures.anthonycrudele.com/podcast/469/

I wish you well in your trading.

truckertrader 

Can you guess what the key word is here in your statement? It's " if. " It might be beneficial to you to change your psychology. Your looking too much at what you could make as opposed to what you could afford to lose. If this is " life changing money" then maybe it's time to switch to the micro's. You " MIGHT" not make as much money as you want, but you will NOT lose as much as you have been. That's what really important, the losing, not the winning. It will give you time to focus on your strategy and process thereby building your confidence in the meantime. I just recently listened to this podcast and I thought the guest insights were really good as to what we as traders should be concentrating on, the process............not the outcome. https://futures.anthonycrudele.com/podcast/469/ I wish you well in your trading.

Oh for sure, I realized I'm a bit in over my head. Although I was not risking more than 1-2% per trade, my stop loss was way too tight, leaving my account to slowly bleed.
Playing the "IF" game is entirely useless, I was airing a bit of frustration. Getting whipped out, second-guessing the next trade and watch it rip in your direction. It's frustrating, especially when the account is under water.

I took a few weeks off, now I will zoom out and switch to micros. I think I will have a much better time, and pulse will drop a bit.

Thanks! And thanks for the podcast tip! I just subscribed to a bunch of oil and energy market podcasts, I'll take a look!
For those interested, these are:
"World of Oil Derivatives"
"Oil Markets"
"The HC Commodities Podcast"
And yes, a lot of it is going straight over my head!

Oh my, has it been over a year!

Well, I took much needed time off, focusing on humping my day job for first half of 2025.

Then I started selling options on futures, mainly energy, metals and something called a 1-1-1 strategy on /ES.

It's been going well, too well. Up 34% since May. Not yet sure how I will handle insanely large moves in the underlyings, but surely that will be the trick to remain profitable, since so far I'm just exiting on 50% profit.

Are these forums dead or what? No one to analyze energy markets, talk strategy or learn?!