Wouldn't swap be a problem?
Brent crude oil 15 replies
Energetic H1 Strategy (Crude/Brent/Gas) 438 replies
Buy Brent-Crude Oil w/target @ $35 0 replies
What kind of data does my broker provide for Brent Crude Oil? 0 replies
Hedge WTI and Brent Oil 1 reply
DislikedI'm thinking for this type of strategy to be profitable, we'd need an indicator (line chart) that plots the spread between WTI and Brent. So if the spread is well-above X level we'd sell WTI/buy Brent, and if it is well-below X level, we buy WTI/sell Brent. When the spread is on the extreme end, we open a trade, but when the spread is close, we stay out. I haven't worked out all the details but I think we'd need something like that so we know when the spread is historically large and small.Ignored
Disliked@C8H18 Yes, you are right. But this does not matter enough to explain the different prices. The strategy is looking for a correction of an imbalanced pricing. The bigger the spread between both the better it is for the strategy. Brent and WTI are highly correlated pairs. In a perfect market situation both should price almost the same. If we like we could call it an arbitrage strategy. Because of this it is important to manage the risk of both positions right.Ignored
Disliked{quote} But I think we need Brent-WTI instead of Brent/WTI. (Brent minus WTI, not divided by) ... I wonder if there's a way to work with that instead though...Ignored
Disliked{quote} This strategy has possibilities to work. Years ago you could arbitrage EUR/USD and USD/CHF.Ignored
Disliked{quote} But I think we need Brent-WTI instead of Brent/WTI. (Brent minus WTI, not divided by) ... I wonder if there's a way to work with that instead though...Ignored
DislikedCheck this out - on tradingview I was able to plot UKOIL-USOIL (minus, not divided by) to see the spread between the two: Date range: Sep 2016 til now:{image} The spread between the two is 6.11 currently, but has gone as high as 11 in the last couple years. Maybe with this system when it gets up to 10/11 range, we buy USOIL, and sell UKOIL - expecting the spread to get smaller eventually. Conversely the lowest it's been in recent years is in the $2-3 range. If it were to get down there again I'd sell USOIL and buy UKOIL. (I hope I got that right,...Ignored
DislikedYeah we'll have to see the spread. Right now the spread is lying in the middle of the range... currently at 6.13, barely unchanged since yesterday:{image} So.... I sit out of this system for now. However I'll watch this chart to see any developments.Ignored
DislikedCheck this out - on tradingview I was able to plot UKOIL-USOIL (minus, not divided by) to see the spread between the two: Date range: Sep 2016 til now:{image} The spread between the two is 6.11 currently, but has gone as high as 11 in the last couple years. Maybe with this system when it gets up to 10/11 range, we buy USOIL, and sell UKOIL - expecting the spread to get smaller eventually. Conversely the lowest it's been in recent years is in the $2-3 range. If it were to get down there again I'd sell USOIL and buy UKOIL. (I hope I got that right,...Ignored
DislikedI've been in the trade for 12 days. It's slowly but surely coming back and might just turn positive. We'll see! {image}Ignored