Spread Trading - A Simple Trading Strategy for Maximizing Your Profits

Discussion in 'Commodities' started by iGuru, Sep 29, 2010.

  1. iGuru

    iGuru Active Member

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    Hi Ravi,

    Yes it can be applied in the equity market (Cash & futures). But I don't know about options.

    In equity futures you can apply it on the different script of same sector.

    Currently I don't have a good grip in equity market (except for long term investments for minimum 5-10 years). So I'm not in a position to tell you indepth as i'm in the learning phase in equity market.


    Regards,

    iGuru
     
  2. hyraj

    hyraj Member

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    #Quote:
    Originally Posted by sprintravi75
    dear iguru

    u are really a guru in this. pls tell me can this be applied to futures and options in indian market

    regards

    ravi #

    Ravi i think Guru is right......u hav to select the TWO SCRIPTS of SAME SECTOR.........provided th big diffrnce in beta factor.......let's keep studying Guru's Strategies n apply on Futures experimentally.
    ==
    Regards
    HYRaj
     
  3. TRADER24

    TRADER24 New Member

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    IGURU SIR,
    THANK YOU VERY MUCH FOR NICE EXPLANATION ON A RELATIVELY NEW TOPIC (FOR US NEW TRADERS) ON SPREAD TRADING.:clap:
    I HAVE A QUERY .PLEASE EXPLAIN IF YOU HAVE TIME.
    THERE WAS SOME PRICE DIFFERENCE IN GOLD OCT AND DEC FUTURES CONTRACTS.
    ON WHAT ANALYSIS DID YOU SHORTED OCT MONTH CONTRACT AND NOT DEC FUT ?.BECAUSE THE DEC MONTH CONTRACT REMAINED ALMOST SAME , WHILE OCT FUT CONTRACT FELL AS PER YOUR ANALYSIS AND YOU MADE NICE PROFIT:clapping:
    HOW TO DECIDE WHICH MONTH CONTRACT WE SHOULD GO LONG OR SHORT?IS IT THAT THE DIFFERENCE BETWEEN VARIOUS MONTH FUTURES CONTRACTS CHANGES AS EXPIRY COMES NEAR .(LIKE ON NSE FUTURES ,ON EXPIRY DAY CASH AND FUTURES DIFFERENCE BECOMES ZERO PROVIDING ARBITRAGE OPPORTUNITY.)

    ALSO ANOTHER QUESTION IS THAT WHY DID YOU CHOSE LEAD AND ZINC FOR SPREADTRADING. DO THEY HAVE A CLOSE RELATION.(I AM SORRY IF QUESTIONS ARE VERY BASIC BECAUSE RELATIVELY NEW TO THIS KIND OF TRADING). BUT SIR PLEASE ANSWER TO THESE QUESTIONS SO THAT WE CAN CLEAR OUR DOUBTS AND DO FURTHER RESEARCH ON ANALYSIS.
    THANK YOU!!!
     
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  4. iGuru

    iGuru Active Member

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    Hi,

    Thanxs for your comment.

    Please go throgh this link, it will help you to understand better. If you still have the doubt then we will discuss it.

    Yes, Lead & Zinc have a very good correlation between them (as more than 84%).

    http://www.traderji.com/commodities/45523-spread-trading-strategy-calculation.html#post474453


    Regards,

    iGuru
     
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  5. DanPickUp

    DanPickUp Well-Known Member

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    Hi you

    ""One of my good friend says it as “minus-sum” game as it include brokerage & other charges in it. "" ( First post from you in this thread )

    Is it possible, to know your friend ?

    ----------------------------------------------------------------------------------------------------------------------------------------------------------

    ["]Intramarket Spreads [/B](My favourite Trading Strategy) ( First post from you in this thread )

    ""An Intramarket spreads are done only as calendar spreads."" :confused:

    Serious : I never heard about a future calendar spread. I trade options calendar spread some times but even my friend ( Guy Bower, which writes books about futures) never told me about a future calendar spread. So you may have some thing new ?

    ----------------------------------------------------------------------------------------------------------------------------------------------------------

    ""This month I had applied a spread strategy on Lead & Zinc which gave me a return of Rs. 18,000 on an investment of Rs. 45,000 on two lots within 5 trading days (i.e. Return of 40%)"" ( First post of you in this thread )

    We may see your bank account about that ? and the chart, where you implemented this strategy. Thanks for your cooperation.

    DanPickUp
     
    Last edited: Oct 9, 2010
  6. iGuru

    iGuru Active Member

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    Hi

    Thanxs for your valuable comment.

    Yes it is possible to know him....... but I don't know whether he want to meet you or not. I will ask him to PM you.

    Secondly, if you don't know about futures calender spread, then it is not too late to learn about it....... two years back even I don't know about it (even I don't know about the commodity trading at that period), but I learnt it and still learning lots of things....... it will be very thankful of you if you will be able to share your views & strategies w.r.t to commodity trading (if you have any) and can you also share some books written by your friend Guy Bower on future trading. as it will be very helpful for all of us here.

    Finally the third one, thanxs for giving me this idea. From next year onward I will maintain a trade log for all my trades and if possible then also keep the charts with me.

    Thanxs again for all.



    Regards,

    iGuru
     
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  7. DanPickUp

    DanPickUp Well-Known Member

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    Hi iGuru

    Do not take all of my post to serious. Some times I provoke a bit.

    -About your friend. Hope he is fine and he not has to contact me.

    No to the serious part :

    -Future spread trading : No problem about that. The only thing which made me posting was the name you used for that. ""Calender future spread trading.""

    I am clear about that, but I never heard some body calling it the name you call it. For me it is just : Future spread trading.

    I am perfectly clear about future spreads and inter market futures spread. I do not trade them often. Guy Bower does. I also posted some where a free booklet from him. Must be in the future section of this forum as there was once a thread about future spread trading.

    Future spreads are much more easy then option spreads, as a future is not as complicated as an option. Joe Ross had a little free newsletter about inter market spreads. I do not know, if he still has it. Just check his page.

    -Finally : I always get suspicious when I read in a post about how much money one has made. I am clear, that making money is always good. I am clear, that making huge money is possible and our all target.

    But when posting such comments, I like to see it black on white with an official bank name. Posting profits is easy,. Making them needs a little bit more. So I like to see the prof of such comments.

    About the chart : That is after you. Was just a thought. When ever I make a journal about a trade, I always make a picture from the chart and point the entry point on it. If the trade went wrong, I then can later analyze the chart picture again and may see the mistake already on the chart.

    Have a nice Sunday

    DanPickUp
     
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  8. iGuru

    iGuru Active Member

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    Hi,

    Thanxs for you comment again.

    I took your post serious not in a negetive way, but rather than in a positive way.

    You are always welcome to share your view (untill I will face the hard part, I will never know where did I went wrong). I may went wrong somewhere in the article and you pointed it out (thanxs for it, as it will elp me to correct the errors & to add more points and views of mine/others in the article....... to help the readers)....... about the calender spread that I mentioned is just to make the member understand & get familiar about it.

    Thanxs for the info. regarding the post you made in this forum. It will be helpful for us if you will provide the links that you have posted w.r.t futures trading by Guy Bower here, as it will be helpful for all of us here again to learn more about future trading.

    Myself also always get suspicious when I here someone saying (specially on websites & SMS) that we provide calls with 85-90% accuracy or a profit of 1-2 lakhs per month etc....... and I always ask them to prove me not by showing me the track record but by impementing actual trade.

    In future I will try to post the examples on real time, so that it will be easy to understand by all. (Thanxs for this suggestion)

    Thanxs again for all and Wish you a Happy Trading.



    Regards,

    iGuru
     
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  9. DanPickUp

    DanPickUp Well-Known Member

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    Hi iGuru

    Here the link to your request :

    http://protradedigest.com/?page_id=1421

    There is a lot of free and valuable stuff. You need to make a registration and that is it.

    Take care

    DanPickUp
     
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  10. iGuru

    iGuru Active Member

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    Hi,

    Thanxs a lot for sharing this like with us. It will be very helpful for all who want to know and learn more about futures trading.



    Regards,

    iGuru
     
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