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Spread

waiting for HEN2020-HEV2020 to entry There is a big potential for the gorwth of this spread. Normal price difference of those 2 contract months is 10 points. (1pt = 400$) I will have eye on this spread since i see it as a huuge oportunity, which i do not want to miss. SL could be set below the recent low: -4.7 PT could be: 5-10 As i already have some contracts of this spread, i will add another contract after the spread close above that indicated level. I do not recommend to anyone to hold the position as i am doing, because i have a big account and many experiences to manage risk. But who is looking for good trade, there could be one within days. Good luck to everyone.
CME:HEN2020
by Martomin
Spread and ArbitrageGenerally, spread is the difference of two or more (it’s called basket then) financial instruments. Each instrument is generally taken into calculation multiplied by a weight coefficient. If a negative weight is used, the instrument will be sold when buying the spread and the other way round. Most traders say that markets nowadays have changed, become more volatile and chaotic. They are definitely harder to trade than 5 or 10 years ago. Classical trading, which worked a couple of years ago, now doesn’t. So most traders are in search of “the magical tool” to predict the markets, often using complicated mathematic formulas or even astrology. People are in search of a robust strategy, which will produce stable profit despite all the market changes. One of this strategies is spread trading. One important thing when trading the basket is the correct choice of instruments. Often highly correlated instruments are used, for example stocks of companies which operate in the same inductry, futures with different expiry times, currencies which depend on each other. This hint gives the opportunity to achieve a market-neutral position, where trader profits from divergence and convergence of instruments’ prices. Different types of spread trading are arbitrage trading and pair trading. Arbitrage trading is based on trading the same instrument or similar ones. Depending on the tools used, arbitrage trading can be divided into several types: – spatial arbitrage assumes the same instrument, traded on different exchanges, is used; – equivalent arbitrage is using an instrument traded on different markets, for example stock – futures on this stock, or stock – ADR; – Calendar arbitrage, where futures with different expiry dates are traded.
by TaherJalili
2
USDJPY 108.30 RESISTANCEThe US dollar has continued its breakout rally against the Japanese yen currency as risk-on trading sentiment in broader financial market improves. The USDJPY pair will turn technically bullish over the medium-term if price moves above the 108.30 resistance level. Traders should note that a breakout above the 108.30 resistance level could cause the USDJPY pair to rally towards the 111.00 area. The USDJPY pair is only bearish while trading below the 107.30 level, key support is found at the 106.90 and 106.03 levels. The USDJPY pair is only bullish while trading above the 106.90 level, key resistance is found at the 108.30 and 109.00 levels. Do your own analysis ... Dont Forget Moving StopLoss At Breakeven Disclaimer! This post does not provide financial advice. It is for educational purposes only! You can use the information from the post to make your own trading plan for the market. You must do your own research and use it as the priority. Trading is risky, and it is not suitable for everyone. Only you can be responsible for your trading.
by tyleralee
NZDUSD Aloha, welcome to the new week! Wanted to share a tip that has helped me save money and kept my psychology sane: Let the market develop for the first few hours before placing a trade. Reason being is spreads are usually steep and the market can be volatile and choppy. NZDUSD was on my watch at the end of last week and my last analysis shows that I would be going long on this trade, however, applying a the rule of "let the market decide in the first 4-5 hours", minimum, has saved me from a quick loss of -1% on this trade and countless others trades. I like the 15min wedge for a continuation, the 50ema on 4hr, 1hr, and 15min all support my thoughs of going long. However, The daily is stil developing to either break above the 50 or reject it and have a crash. Any way, hope this in your trading journey! Stay patient and wait for your strategy to play out, no need to rush it! Mahalo for reading, happy trading all!
Education
by Reid_Hicks
Trading Edge 2020 Portfolio -Trade #5- MCD - Call Debit SpreadTicker: MCD Position: - Feb 14th Expiry - Long 210 Strike call = 3.78 - Delta 0.92 - Short 212.50 Strike call = 1.90 - Delta 0.62 - Net cost = $1.88 - Break even at expiry = $211.88 - Max profit = $0.62 (33%) - Run 5x contracts = $940 Profit/ Exit targets: - Exit position if MCD closes below the 21 ema on the daily - Max profit is target, you may wish to run 80% max value of spread as your exit ($2.376 GTC sell order for spread) Rationale: - MCD has bounced off the 21 ema - MACD is signaling a potential bullish continuation on both daily and lower time frames (4hr, 1hr etc.) - MCD is within 4% of prior highs - Moving averages are all stacked bullishly - Appears to be in a solid uptrend, looking for some near-term trend continuation -TradingEdge
NYSE:MCDLong
by Profit_Link
Spread Day: Opportunity on Gold vs EURUSDI was looking for some spread opportunities to have fun with reduced risk trades. Possible opportunity relies on Gold/EURUSD spread. The week started with Gold losing 0.8% and EURUSD losing 0.10%, trading around its 20 Period SMA. I plotted XAUUSD chart and overlapped it on the EURUSD chart (using 4h candles). I found one interesting shared support ($1509 for Gold and 1.1084 for EURUSD) and one interesting shared resistance ($1601 for Gold and 1.1238 for EURUSD). Furthermore, you need to know that Gold and EURUSD are usually positively correlated (if one is UP, the other one is UP too). However, in the last weeks, the correlation did not hold, and the two securities started to be again positively correlated over the previous five days (Green vertical line). In that situation, we can analyze the spread between the two securities and, if the spread is trading near the limit of normal Standard Deviation (represented by Bollinger Bands), we can buy an asset and sell the other asset. In that graph, I represented the Gold/EURUSD Spread. The spread is currently trading around its 20 Period SMA (Purple Line). In that case, we would like to buy Gold and sell EURUSD. The ones of you able to manage risky spreads will preferably enter in that situation immediately, the "side-watchers" will prefer the opportunity to form perfectly (and it happens when the spread price reach the orange curve level). By the way, even if in this situation, I would like to enter the trade. In the graph below, you will find XAUUSD on the left and EURUSD on the right. MACD shows possible reversal during the current week for Gold and Consolidation or even reversal during the current week for EURUSD. Finally, remember that spread trading is used to make a gain on the spread difference between two assets. (No speculation on assets, but speculation between their average spread). Don't forget to like this idea and to follow me. If you have doubts on spread trading or similar topics, don't hesitate to contact me privately. Disclosure: My ideas contain statements and projections based on assumptions on capital markets, and therefore inherently subject to numerous risks and uncertainties. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal. I am not a financial advisor.
OANDA:XAUUSDLong
by Investing_Fellow
BTC Put Ratio SpreadBTC-28FEB20 Put Ratio Spread Sell 2x 2/28 6500P for 0.0430 ($315) Buy 1x 2/28 7000P for 0.0700 ($510) Net Credit: 0.0160 ($120) Max Profit (if pinned @ 6500): Approximately 0.0850 ($620) Margin Requirements: 0.2700 ($1975) due to Deribit not having complex orders Break Even: $5,880 This is a neutral to bullish trade. Anything above 7000 and profits are capped at the credit received. Max profit is actually achieved if I am wrong directionally and we dump to 6500. Adds some positive portfolio delta and brings in about $4.55 of positive daily theta. If we see a strong move to the upside, I will look to buy a 6000P for less than the credit I received for the trade which will cut into profit potential but also remove all risk from the trade turning it into a free butterfly spread. Any price action within the body (6000-7000) I will sit tight and let theta decay work in my favor. Would close out trade at 25% max profit (0.02125/$155). This is a fairly high probability trade but will likely take a bit of time before showing decent profit. Expected move for this cycle is about +/- $1,350 so this can stay profitable even if we see a full move to downside. Will likely close out though if we see 6k breached.
DERIBIT:BTCUSD.P
by DefineRisk