It's a nice setup, but I just don't like being short gold. Any whiff of a crisis and I don't think any spread will hedge a jump in gold.
CME Intermarket Metals Spread Ratios show 2 Platinum versus 1 Gold with a 65% margin credit. http://www.cmegroup.com/trading/met...l?marginsTab=INTER#sector=METALS&exchange=NYM
Yes ... about $5800 with a profit objective of $2000. That's about 34%. Luv those margin credit spreads !!!
My new clients are usually astonished at the diversity and number of spread positions they can have on simultaneously with such modest capitalization. Having said that, I wouldn't necessarily recommend a metals, or cotton, or energy crack spread for my noobs transitioning from paper trading to the live markets. But the higher margin credit spread combinations will likewise have less volatility and higher correlations typically. You might be in a Eurodollar butterfly spread for five months. Likewise, you might hit your profit target or get stopped out in SI vs GC in a matter of days !
Yes I'm still in. I bought in @ -16 and @ -46. I'm about back even now after being way underwater. Playing for the spread to expand upside when metals complex make a bullish move. Lately metals complex has been weak.