Calender Spreads - Gold and Silver

[sumeetsj]

I feel its time to start a new thread only on Calender Spreads. A lot has been spoken about it in different threads.

By definition a Calendar spread (also called a time spread or horizontal spread) is a spread trade involving the simultaneous purchase of futures or options expiring at particular date and the sale of the same instrument expiring at another date. The legs of the spread vary only in expiration date; they are based on the same underlying market and strike price.

e.g. Buy Gold Feb futures and Sell Gold April futures.

So instead of writing lots of theoretical stuff, lets discuss.

Please give your suggestions / comments / queries / doubts etc.

 

[sprintravi75]

hi sir,

nice initiative, will help manny novice traders, good start, go ahead.

ragards
ravi

 

[sumeetsj]

Now we need to watch out as i feel this fall will provide a good opportunity to enter some trades.

 

[sumeetsj]

You are right. This is the situation where this trading system renders useless.
But can you please elaborate what was your basis for taking this trade.
It will be helpful.

 

[mehtaka]

i have strted analysisng Gold april and june futures....

i'll surely put some inputs...

 

[sumeetsj]

Looking forward to your inputs..

 

[VBS2010]

i have strted analysisng Gold april and june futures....

i'll surely put some inputs...

Hi,
Yesterday i enter into GoldM spread,
Buy GoldM (5-March) & Sell GoldM (5-April) with taking difference of Rs. 172,
Hope very early days spread reach to 100-120,
Can Any1 tell me the normal range of spread?

Thanks

Regds
VBS

 

[sumeetsj]

Hi,
Yesterday i enter into GoldM spread,
Buy GoldM (5-March) & Sell GoldM (5-April) with taking difference of Rs. 172,
Hope very early days spread reach to 100-120,
Can Any1 tell me the normal range of spread?

Thanks

Regds
VBS

You can follow steps given by iguru in his thread,
http://www.traderji.com/commodities/45523-spread-trading-strategy-calculation.html
and download data from MCX website to calculate yourself

 

[VBS2010]

You can follow steps given by iguru in his thread,
http://www.traderji.com/commodities/45523-spread-trading-strategy-calculation.html
and download data from MCX website to calculate yourself

Thanks sumeetji,

i already refer for Lead-Zinc spread,
But some how practically not done in well style.

if u have any other strategy or formula, pls share

thanks

Regds,
VBS

 

[sumeetsj]

In my opinion, unfortunately spreads that can be taken in Gold and Silver are only calendar spreads.
The parity in Gold and Silver(unlike Lead-Zinc) is tough as -

1. Different asset class, (even though both are precious metals, Silver has got more industrial consumption/use than Gold)
2. Different margins
3. Different lot sizes

Also both metals generally move in tandem(apart from some exceptions).
Hence we have to take a calendar spread only when it comes to Gold and Silver.