To me, the very front end of the curve ( first two months or so ) is so married to the front month spec flows. It is usually delta directional with the underlying. Myself personally, and my clients, are almost always active mid-curve and beyond. I have some clients who make very good livings trading three to five years out in the curve in fact. Energy and STIRS to be precise.
I was just coming back to comment on the front end of the curve... It just doesnt want to seem to stop...... Is this something that happens from time to time? It certainly looks like it is just moving in step with the front month... to this untrained eye anyway.... Bone without giving away too many secrets, anything in particular why you/your clients stick to the further out contracts? Just to get away from the speculators?
Further out in the curve, the order flows are primarily commercials and the supply factor is the driving dynamic. I personally can't stand choppy, neurotic trades ( i.e., the front month spec order flows ). I am always looking for spread combinations that "behave" and act smoother and model better. My 2 cents. And butterflies and condors are the cat's ass.
i've definitely taken some hard lessons trading in the fronts recently. they drift for a bit then literally jump. where is the threshold for "back" month calenders.. I notice about apr, may area of 2014 is the area where this whole front fiasco stops having much influence.
I'm wondering if the moves in the front end have much big money scrambling to cover, further fueling the move, or whether everyone is piling in and making out like bandits here?
Any thoughts on the WTI /BRNT spread ? WTI getting strong, not a dollar move ? Would you put that on in the front say DEC ?
long the calender means your long farther out then you are short.. just in with options.. short the calender would me your long in the front leg of your spread.. in this case yes i'm short nov long dec