Wool spreads - broad vs. fine

Discussion in 'Ag Futures' started by chameleontrader, Feb 19, 2006.

  1. Hi,

    is it a good idea to trade wool spreads?

    Broad wool is very much in tune with fine wool since the end of 2001.

    To me it seems fine Wool has a long way to go vs. broad wool.

    Is there a fundamental reasoning behind this?

    How can I structure a broad/fine spread bet?
  2. You would buy one and sell the other, depending on your view of the relative richness/cheapness of the spread.

    However, I see that only 2 fine contracts traded on Friday. The daily volume for the broad contract averages about 6 or so. Do you really want to get involved in such an illiquid market?
  3. Oh. No, not really. Which Exchange is that? Perhaps the Bremer Woolexchange has more action.
  4. I looked up wool contracts on Bloomberg and the only ones they had listed trade on the Sydney Futures Exchange (these two) and the Australian Stock Exchange. Not familiar with the exchange you mentioned, but I would do my due diligence before doing anything.