HO, RB, NG liquidity

Discussion in 'Energy Futures' started by TraDaToR, May 24, 2007.

  1. TraDaToR

    TraDaToR

    At the time, it seems that only CL has decent B/A spread intraday.

    Do you think NG, HO, RB spreads will narrow with time ?

    I guess it would be difficult for MMs to make money while maintaining a 2 ticks B/A spread on NG for example...
     
  2. There are no MMs.

    And as a percentage of contract, those spreads are tiny.
     
  3. TraDaToR

    TraDaToR

    You can call them unofficial liquidity providers if you want... I say MMs cause it's what they do.

    I agree that spreads are quite tiny considering the daily range, but I will wait to see if it narrows further to trade it. Those contracts are great for trend following.
     
  4. I scalp CL, but at some point I was trading NG off CL, by that I mean I would grab NG if it was lagging on the way up or sell if it was lagging while CL was dropping. While the bid/ask can be wider then on CL the swings are also bigger so one can set one's money targets wider.

    This of course worked (to some degree :)) because I was acting as a market maker but I can see the peril in paying the spread.

    GC
     
  5. You weren't making a market; you were speculating NG would trade in the same direction as CL.
     
  6. I take it then there are no specific liquidity providers in NG then? Guys that are there specifically for that job?
     
  7. every participant, small or large, provides liquidity.
     

  8. When it is hectic it can be twelve points between bid/ask and I regularly trade inside it at 10. At that point I am providing liquidity.

    GC