Crude Oil (CL Large Contract) Spread Trading

Futures Spreads is by far the best and most efficient way to trade the energy markets, bar none. And you can play over a dozen of different strategies.

 

lol sorry guess I should learn to read. When I hear spread i think options. When creating these "outright" spreads do you ever use CL and the QM at the same time to manage your delta depending on what you will happen short term? For instance right now I'm short 3 FEB QM's but will scalp the current month CL to the upside depending on the PA.

 

agree 100%...thanks!

 

no...have never done this...also, FYI, when talking Crude Oil futures spreads...talking about trading an actual spread contract and not making your own "spread" by trading long/short 2 various CL contracts...I.E. Buy CL Jan10 and Short CL Feb 10

 

Hi all,

Sorry to wade in! I'd agree spreads are a profitable way to trade.

But 'Increasenow', on reading this thread I would have to say I am in 'l2tradr' camp.

Demo trading to test how the spreads perform is a great idea.

However, in order to assess how the spread performs, surely you have to have a reason to buy the spread in the first place (be it technical or fundamental), and then see if the spreads work how you expected.

You cannot for example just sell Jan Feb CL for no apparent reason and then see what happens. Surely you have to say... I believe the Jan will fall at a quicker rate than the Feb because of a build in crude stock levels; therefore I will sell the Jan Feb spread.

You then have a basis from which to work.

 

For some people, the market is a "business". For others, it's "entertainment".

 

papa...I agree...was simply seeing how they work...not study and actual reasoning behind trades begin...you trade CL spreads?

 

Hi, I look at CL spreads, Brent and GO spreads - on ICE.

 

Couple of question. Just trying to learn the theory here.
1) why would a build in inventories cause Jan to fall at a quicker rate than feb.?
2) What if you thought a build in inventories caused Feb to fall at a quicker rate then January. How would you trade that then?
3) If you thought a shortage in inventories caused Jan to rise faster than Feb you would go long the jan feb spread?
4) What if you thought a shortage in inventories caused Feb to rise faster than Jan. How would you trade it then?

 

are there any books or good sites on info on what drives spreads in the oil markets and/or nat gas markets.