Spread Trading - A Simple Trading Strategy for Maximizing Your Profits

Hi iGuru

To complete about Joe Ross :

http://www.trading-naked.com/library/Bonus Future Spread Trading.pdf

That was written by Joe Ross. A small PDF with charts and simple to understand trade examples.

Take care

DanPickUp

M r guru
i think u r absolutely correct , i am also doing this spread strategy
since last 6 months , and after doing i came to this conclusion that only lead and zinc spread is the best and from my money loosing experience i can say never take position for 0 difference to 4-5 or
-4to -5. Always take position when difference is more then zero for closing your position to zero difference.
Never try this in crude where the two months contracts can touch 250 rs difference and i have lost the money there for this.always remember which commodity don't have delivery the difference can be any extent.

Can you give an example. Need not be actual just to understand it better.

Re:Arbitrage Opportunities with physical deliveries

We are physical commodity traders(rubber) without much of futures experience.

We were suggested by a broker for spot purchase and sale in far month futures with physical delivery whenever there is arbitrage opportunity between spot prices and far month futures price.

I u'stand delivery price will be the last traded price on 15th of the delivery month. in the event of bearish market in the delivery month, there is a possibility of trading loss if physical delivery is tendered. What should be the strategy at such a situation? pl enlighten.

thanks

mdr_jain

take a ex. Lead at 105/- and zinc at 100/- then short lead and buy zinc ,and squareoff ur both position when rates become equal or near to equal. Here the diff is 105-100=5/- and when the diff will be zero then u can squareoff ur both position . Now don't play again when difference the difference is zero means lead and zinc both at same price , at this time wait for the diff.that may be 5 or -5 ,means lead at 100 and zinc at 95 or vice versa,then again buy the lower one and sale the higher one and wait again for zero difference. That stratedy workd always.

Dear i guru

today the spread diff in silver is near 300/- can we take position in siler by selling far month and buying near month silver???????????? Plz reply me soon

When ever you enter in the market always first decide your enter and exit point with stop loss. it may increase your profit in trading.

Guruji,
pl.continue the thread, and tell your position daily.
regards,
naren

Am a late comer here, and a new comer for Spreads!!
Thanks for spending so much time for others!!!
In your first post you have given an example of Buying Dec Gold and Selling Oct Gold.
How does one decide which one to Long and which one to Short? Because this seems crucial, as we would have made 'loss' had we initially bought Oct Gold and Sold Dec. Gold.

Maybe I missed something and you have already clarified this point... please point me to it!!