hi let's say i believe that October Crude will gain on December Crude. Then I would go long on October crude future and short December. However this approach also has great risk. Is there any option combination which will act as a call option of this October/December spread. I heard such spreads are listed on NYMEX as http://www.cmegroup.com/rulebook/NYMEX/3/390.pdf but I am not sure whether they are liquid. Actually I am looking for a way to manually construct the position from independent calls/puts of calendar months. regards etem
yes they're called csos and you can usually get a tight market on atm front month options, I am pretty sure you would have difficulty though with a strange spread like v/z especially when it's not front month but you might have some luck when v is front month in September. Also at the moment they are only pit traded.