yeah the ratio collapsed today. Alot of relationships that I thought were done returned though. i.e. wheat/corn. I like the spread at parity definitely
Not yet. I am patiently waiting for parity or preferably a discount. So far the spread is still narrowing, and the economic factors at play e.g. the collapse of the commodities bet amongst hedge funds, and especially the massacre of the auto industry are still playing out. I have thought about the ideal entry here and perhaps it will be when one of the major auto companies declares bankruptcy. I can imagine a day when say GM goes belly up, and there is a big spike down in platinum with gold maybe going up on flight to quality demand. That would be where I would ideally want to enter. I hate being early The nice thing about buying at a discount is that your risk is maybe 10-20% tops, your reward is 100%+, and your probability of profit is enormous, must be at least 90% in the long run. I like that far better than buying at a 10% premium where you have 30-40% risk and 50% profit, and could well take a lot of heat on the trade before it swings into profit.
Does one need Nymex floor data to trade platinum? I don't get any data with IB. I'm interested but I don't want to add Nymex just for Platinum.
Nice trade ideas guys, I always like hearing about things like this on ET because it gets my trading brain in gear. The platinum/palliadium spread is one to keep an eye if it goes to parity. All of these spread are good because they have long gamma characteristics like and options play. Speaking of options, does anyone know of a retail broker who would make a market in options on a spread like this? I'm thinking a long term backspread to the upside would be a good position.
Interesting that the spread inverted just as the auto-bailout got rejected. IMO it's worth waiting for a GM/Ford bankruptcy, that could really make platinum collapse relative to gold, and would be the definition of price-insensitive forced liquidation. Also, it will bust out a lot of spread traders due to margin calls. Buying when these people are selling should ensure entry near the best prices.
Mentally, I am thinking about 1.05 or higher to enter with high expectancy. But that's just a guess, really.