What's going on in the Jan/Feb Crude Spread?

Discussion in 'Energy Futures' started by xDojix, Dec 8, 2008.

  1. xDojix

    xDojix

    Anybody notice the huge sells that went through Friday ahead of the close and then again today at the close?
     
  2. ?......huge bear-spreading? :confused:
     
  3. xDojix

    xDojix

    If you go through the time and sales you can see Friday in the Jan/Feb spread book
    31,207 spreads traded with tons of +100 lot trades on the bid in the last hour of the pit session with most of that volume happening in the last 10 minutes. That is against 27,236 trades total in the rest of the day session.

    Today the numbers were a little more reasonable but still looking pretty weird. 31.207 trades in the last hour against 50,793 in the rest of the session.

    The daily price bars are longer yesterday today and today then I think pretty much any other day in the history of the contract. So the action does stand out to me...
     
  4. What do you do now? :confused:
     
  5. xDojix

    xDojix

    get short ahead of tomorrows dump off?

    Complain on other forums?

    Trade the ES instead?
     
  6. This is just a play using the Settlements. People buy settlements through out the day, then smash the spread in the last hour hoping to get the settlement price lower than where they sold.


     
  7. F/H CL got murdered too. It had been following CL rallies pretty well until yesterday.
     
  8. jkerviel

    jkerviel

    I don't trade oil futures but usually follow them and trade USO . Would someone who understands the transition from one month to the next , specifically the expiration about to take place in Jan contract, please explain how the $5 difference with the Feb contract will be resolved. Will the price suddenly gap up $5 to the Feb. price or stay at or near the Jan. price ? From another thread on this site I read that the contract expires tomorrow and there's still a $5 difference.
     

  9. The Jan WTI goes off the board today on the ICE market, and tomorrow on Nymex.

    $5 is a pretty deep contango spread for the Jan / Feb. Logically it could 'gap up' if you were looking at a front month chart come Monday, but you have to feel that Feb will come closer down to Jan. If there's perceived to be no Oil today to deserve a sub $40 handle, then there's no reason why that perception will change come Monday, so there's every reason Feb COULD come lower.
     
    #10     Dec 18, 2008