So I trade CL frontmonth only, and so far contango hasn't impacted my CL decisions. But talking to several other CL traders today, they brought up a point whereby since short USO into these rollovers is making coin, the front month has to get dumped and next month bought obviously. This keeps the next month out more bid then the front month. I'm aware backmonths are even better bid, they have not cracked lows, but obviously it's a month to month thing.
My dilemma is this : I have a long signal generated today for possibly 1-2 days. Do I buy MAR or APR? It would make more sense to trade APR based on this, but so far all my trades have been based on the front month and the next 2 days is still during rollover.
I'm looking at action in both months and will monitor results, but just wondering if someone had a reasoning as to which month to trade in such a contango during rollover.
I have noticed this too, I am holding a short position in the Mar instead of rolling to apr because of this.
If I was long I would roll early. Since I am short I am staying in it longer than I normally would. For you I would definitely buy the Apr instead of the Mar, open interest has rolled to Apr already.