Future Trading Spreads

Are Inter Commodity Spreads Right for You? & Support and Resistance Levels 9.28.2021

September 27th, 2021 Filed under Future Trading News | Comment (0)

Dear Traders,

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Are Inter Commodity Spreads Right for you?

By John Thorpe, Senior broker
Used alone as a strategy or as a hedge over the weekend or longer..
You can still hold volatile positions at reduced margins by employing exchange recognized spreads.
You can trade similar products but from different sides of the ledger, long vs short
Example, Corn vs Wheat ratio 2:1
Notes vs Bonds, Ratio 2:1
Index futures vs each other 1:1
Some traders use these as stand alone strategies, others use them as hedges to straddle a time period, perhaps you don’t want full exposure during an important report but still like your entry price on one leg.
If this is the case you may offset a part of the risk with a different but similar product and receive a margin break for reducing your overall risk.
 Inter Spreads are calculated as a percentage of Credit off the top of the full outright margin of the products that make up the legs of the spread.
NQ Mini Nasdaq 100 vs. YM Mini Dow with a ratio of 1:1 – 55% Inter rate
Outright rates
NQ 17,000    YM 9,000
17,000+9.000= 26,000 outright margin before SPAN inter spread credit is applied
With the inter spread credit applied to each leg of the spread, there is a savings of $11,750
 ( 17,000 x .55) = 9350 + (9000 x .55) = 4950 = 14,300
Of course, you can apply the same logic to the micro contract at 1/10th the size.
MNQ vs MYM = overnight requirement of $1430.00 rather than 1700.00 for the outright MNQ
There are hundreds if not thousands of combination based on correlated relationships that are recognized by the exchange. Please call your Broker or ,if you don’t have an account yet and would like to know more, call Cannon +1 310 859 9572 and we will be happy to spend time with you about this different way to manage your trading risk.


Good Trading

Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors.  You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time when it comes to Futures Trading.


Futures Trading Levels


Support and Resistance Levels 9.28.2021

Economic Reports, source: 


This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts here in contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgement in trading as well as options on futures.

Economic Reports & Futures Levels 3.05.2015

March 4th, 2015 Filed under Future Trading News, Futures Trading | Comment (0)

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1. Market Commentary
2. Futures Support and Resistance Levels – S&P, Nasdaq, Dow Jones, Russell 2000, Dollar Index
3. Commodities Support and Resistance Levels – Gold, Euro, Crude Oil, T-Bonds
4. Commodities Support and Resistance Levels – Corn, Wheat, Beans, Silver
5. Futures Economic Reports for Thursday March 5, 2015

Hello Traders,

For 2015 I would like to wish all of you discipline and patience in your trading!

I put this piece together for equities.com about spreads and futures spreads.

Although this specific spread I wrote about (long unleaded/short heating oil) is nicely in the money and probably too late at these levels, I discuss some resources and ideas that are a good read for anyone looking to diversify their trading, perhaps add a different weapon other than day-trading and in general:

Looking To Exploit Seasonal Balancing Within The Energy Sector

Futures spreads are another tool traders should be familiar with. In short, a spread will consist of being long one commodity and short another.

There are intra-commodity spreads, like being long May corn and short December corn, and there are inter-commodity spreads, like being long May wheat and short May corn.

Personally, I like spreads. At times, they can offer a little more staying power. That does not mean that spreads are less risky, but in my opinion, they can provide a trader with more room to manuever.

There is an excellent article about future spreads written by my colleague at Cannon Tradingwhich you can read here. There is also a great source, called MRCI. The team at MRCI produces many different reports about seasonal tendencies, among other financial concerns. One of their reports is the monthly spread idea report. This month, one spread in particular caught my eye. It is the long May unleaded gas and short May heating oil.

Below is some of the logic shared by MRCI for this trade, which I am sharing with you:

Read the rest of this entry »

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