This spread looks like it is approaching a shortable high. What's the best way to play it? Gold / Plat futures? (Vol in the latter isn't that impressive.) Any ETFS? Spread itself traded anywhere?
I asked my colleague, Mark O'Brien who has been trading spreads for over 25 years to share his OPINION: One of the better ways to trade a spread between gold and platinum is with their futures contracts traded on the COMEX futures exchange. The standard gold contract is the benchmark 100-oz. contract and the platinum futures contract trades in 50-oz. contracts, so the spread is customarily placed with one gold and two platinum contracts to balance the leverage of the legs of the spread. For a fractional version of the spread, you can also trade one miNY gold – traded in 50-oz. contracts and one 50-oz. platinum. Regarding the lower volume in the 50-oz. platinum futures contract, average daily volume for the current front month – April – is ±40,000 contracts, which is ample, yet far from the daily volume for gold’s current front month – Feb – which is typically 300-400K per day. With this in mind, it’s advised to enter the platinum leg of the spread first, sensibly with a limit order, then entering the gold leg of the spread. You can read more on spreads on our website at: https://www.cannontrading.com/tools/the-seasons-of-the-futures-market