Similar experience .. have seen the same group (only) generate Sharpes greater then 2-3, and yes, on capacity constrained strategies, particularly exploiting microstructure more than anything else really.
If you can "use the tape to try to get in at the right time" then why not just punt 1 leg directionally? Think of the commission savings ..
Words of wisdom, courtesy of my old boss from BT, my he rest in peace: Legging a spread is like spreading your legs - you might get fucked
If the mean is the green bands then yes it moves. I think it gets wider with more volatility... Because I dont what that is. Ok...Let me think about this. If One leg has bigger tick swings than the other, then the smaller moving leg needs more contracts to balance things out? So if for example EURO moves 3x as far as CHF, then CHF needs 3x more contracts? Is this matching volatilites?