Question: Hi Guy I have read the book Three Little Spreads Went to Market. Very informative thanks. I have been looking for an alternative to shares that doesn’t have the extreme risk of some other derivative products. Just a quick question: do you see a specific amount in an account to make this type of trade viable? Is it $5,000 …
Relative Stock Performance
It’s interesting to see how the Aussie market has performed compared with the US. The chart shows the S&P (black line) and the ASX200 futures adjusted for the change in the currency. From the recent peak, the S&P has lost 12% and the adjusted Aussie market has lost 27%. So why the difference? That resources tax? RBA minutes? Weakness in …
Look for opportunities in corn & wheat
The combination of late planting and slow maturation in the US corn crop resulted in a full-fledged October weather market in corn last week. In this case the “weather market” came on a freeze warning in the Northwest Corn Belt that is expected to trim 100-150 million bushels off the most optimistic private forecasts of a just a week or …
One for the S&P Bears…
I just read something interesting regarding the current outlook for the S&P. Keep in mind that no matter where we are in the market cycle, there are always extreme bears and extreme bulls. One must keep individual views or stats in the right perspective. However, these are some interesting numbers. The 200 Day Moving Average is often used as a …
Coffee versus the US Dollar
Here is an interesting article on how Coffee is trading relative to the US Dollar right now. It also stands to illustrate a benefit of trading spreads versus outright long or short positions. Full article here -GB
Spreads: Going Long and Going Short
Question: I understand the concept of a futures spread, but I get confused when they talk about ‘going long a spread’ or ‘going short a spread’. Given a spread has both a long position and a short position. How then can you go long or short a spread? Answer: The concept of being long or short a spread relates to …
The reality of Automated Trading Systems
“Instead of spending years trying to pinpoint the Holy Grail of automated trading which doesn’t exist, sit down and focus on gaining the experience you need to find TRUE success. Invest in trading education. Study your trading charts. Practice trading. Learn through trial and error. In the long run, gaining the confidence and experience you need to be successful will …