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My partner and I are both spread traders. Spread trading itself is nothing new, it involves simultaneously buying and selling two related assets, like gold and silver.
I met my partner at the beginning of 2024, and since then, we've been sharing our individual strategies with one another. By combining our insights and approaches, we’ve worked together to develop a more refined and comprehensive strategy for executing spread trades.
In June 2024, we opened an account at Kyobo Securities with a balance of 40,000,000 Korean Won, which was approximately $29,500 at the exchange rate at the time.
So far, we've primarily been active in one of the main Korean futures communities, where we've been sharing our results and trades in real-time. We now wanted to share our results even outside Korea, which is why we're starting this journal thread here.
Here's our results so far month by month:
June 2024
July 2024
Aug 2024
Sept 2024
Oct 2024
Nov 2024
Dec 2024
Jan 2024
Feb 2024 Not Completed
Current Positions
Withdrawals:
Here's the summary:
P/L has been positive for 8 months. Feb 2025 is yet to be completed but we might be suffering a small loss.
Average monthly gain is 6.8% so far.
We will be sharing on this thread when we liquidate current positions and/or enter new ones.
Sold 6 contracts of British Pound M6BH25, Price 1.2641
Bought 3 contracts of Euro M6EH25, Price 1.0477
Current positions P/L: -10,714 Korean won about -$7
Thank you for the warm welcome, I truly appreciate it.
To answer your questions:
- Yes, these are CME micro contracts.
- Correct, we are spread trading between EUR and GBP.
- As for how we spread trade, that's a lengthy explanation to detail fully. Perhaps we'll have time to discuss it in more depth over time. I’m not sure if that would fully answer your question, but what I can say is that we only enter trades when we're confident that the risk is minimal, while still offering a meaningful profit.
- Regarding the 6:3 versus 5:3, you're right that 5:3 would be a more precise calculation. However, for us, the delta difference between 6:3 and 5:3 isn't significant enough to impact the trade’s outcome. Also, sometimes we exit positions incrementally. For instance, in this case, we might exit 1/3 of the position with a slight time delay—so, two micro Pound contracts and one micro Euro contract. With a 5:3 ratio, we'd have to liquidate the positions all at once in order to exit evenly.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,120 since Dec 2013
Thanks Given: 4,488
Thanks Received: 10,348
@leenchoifutures that all makes sense, although as clever as it is I'm not sure I would consider using M6B and M6E to construct a EUR:GBP crossrate a true spread.
What other types of spreads do you trade? I trade a lot of spreads (and even spreads of spreads) in the energy sector. Hence my interest in your thread.
As you'll likely see in this thread going forward, we trade a lot of spreads. In fact, with a larger account, we have the opportunity to trade even more spreads. With this account size, our goal is to achieve an average return of 5% per month. The larger the account, the more spreads we can trade simultaneously, which allows us to aim for a higher monthly return. For instance, with an account over $250,000, we could target an 8% average monthly return.
We are aware of RP and its full-size requirement, but with this account, we're only trading micros due to its smaller size.
As mentioned before, we've been actively posting in Korea and have recently gained a few new team members who are trading larger accounts. The larger the account, the more spreads you can trade, which increases the potential for a higher average monthly return.
It's an honor to have a long-time forum member participating in our thread. Thank you very much!
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals, U308 and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,120 since Dec 2013
Thanks Given: 4,488
Thanks Received: 10,348
@leenchoifutures I would agree that spreads require less money to trade and if your doing it right can have a higher win%. The problem is fees and slippage are more significant, to the point that it makes some trades impossible for retail. As I've said I primarily trade energy spreads. To be effective at this I have a NYMEX seat lease which means my exchange fees are half what non-members pay. This is important because I could buy & sell a Butterfly or Spread of Spreads (ie 4 legs x 2 = 8 legs) and still make money if I can make a single tick (ie $10)!.
