Natural Gas calendar spread.

Discussion in 'Commodity Futures' started by stasbz, Jan 24, 2019.

  1. maxinger

    maxinger

    Honestly speaking, I don't see much benefit in trading NG calender spread.

    Natural gas day range is extremely extremely good.
    It is excellent for outright day trading especially during this winter time.

    If you want to trade spread, you have to understand whether the spread is going to widen, or revert back to mean,
    understand NG production / output, weather forcast, projected usage level, USD strengthening/weakening .....
    basically you must have an edge in trading spread.
    If not, trading becomes gambling.
     
    Last edited: Jan 24, 2019
    #11     Jan 24, 2019
  2. drm7

    drm7

    Almost all calendar spreads are highly correlated to the front month. Think of it as a partially hedged outright position. Of course, it's WAY more complicated than that, given the dynamics of each market (especially natgas, which is supply and weather dependent).

    Natgas also has a big seasonal component. Winter contracts move differently from Summer which move differently from Fall/Spring.
     
    #12     Jan 24, 2019
  3. cvds16

    cvds16

    questions like this make me think you are a beginning trader ...
     
    #13     Jan 25, 2019
  4. stasbz

    stasbz

    your way of thinking like this make me think something is not ok.

    whats the problem with the source of info?

    but why is it so important for you i am a beggining or not?

    my first language is not english.
     
    Last edited: Jan 25, 2019
    #14     Jan 25, 2019
  5. stasbz

    stasbz

    are you profitable?
     
    #15     Jan 25, 2019
  6. cvds16

    cvds16

  7. cvds16

    cvds16

  8. cvds16

    cvds16

    a simple google search would have done the trick
     
    #18     Jan 25, 2019
  9. manonfire

    manonfire

    The front month in ng trades off weather more then the back months. I am long with record lows settling in across the US next week. We could get a Sunday open like the 14th. Physical natural gas trades 24/7 weekends included. Why you will see spikes during peak demand for heating and more so now with so much electricity being generated by ng. Underground storage is still well below 5 year average and just below 5 year average range, we could get a very nice move up again next week.
     
    #19     Jan 25, 2019
  10. cervie

    cervie

    a simple google will not help you. there are many big groups and funds that trade options on the outright futures as well as the spreads. the NG futures market is about 25% of the tradable delta in the natural gas market so what you are seeing is, really, not the real market and is simply the pricing based off of a lot of varying derivatives. For example, you can have a synthetic calendar option that spans multiple months and if there is a weird ope interest or someone wants to bid it they will
     
    #20     Jan 26, 2019
    stasbz likes this.