SpreadEdge Capital specializes in seasonal spread trading across a wide variety of commodity markets. A spread trade is the simultaneous purchase and sale of the same commodity with different delivery dates. SpreadEdge publishes a weekly Newsletter that provides several seasonal spread trade opportunities every week.
Overview
The Commitment of Traders (COT) report, issued by the Commodity Futures Trading Commission (CFTC), offers a weekly snapshot of the positions taken by different market participants in the U.S. futures markets. This information aids traders and analysts in comprehending market sentiment and developments. Published every Friday at 3:30 PM Eastern Time, the COT report reflects positions held as of the previous Tuesday’s closing business hours. Peak Trading Research assesses the latest COT report, examining alterations in price and open interest to provide an appraisal of net fund positioning daily.
Hedge Fund Position Estimates
Heating Oil
Heating Oil ticked up slightly last week after finishing at its lowest level over the past 52 weeks the previous week. finish last week at its lowest hedge fund positions for the past 52 weeks. Hedge hunds added just over 3,000 contracts last week. Note that hedge funds have sold over 50,000 contracts since the high in September. Hedge funds have plenty of capital to add to their existing positions and can drive prices up quickly when they begin to buy.
Palladium
Palladium is likewise just off its lowest level after being at its lowest level the previous. Hedge funds added ~500 contracts this past week. Note that the range is much tighter for Palladium, so this extreme level is not nearly as significant as is with Heating Oil.
Others
Gold is just off its highest level over the past 52 weeks while Gasoline is nearing its lowest level.
Conclusion
I opened a long Heating Oil calendar spread this morning that I discussed last week. This is in addition to a bullish butterfly spread that was already open. These trades will benefit when hedge funds begin to put their excess capital to work.
More Information
Use coupon code “SpreadEdge” and get the Weekly Newsletter and Daily Alerts for $1 for the first month.
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More Information
The SpreadEdge Weekly Newsletter is published every weekend and provides a broad overview of the important seasonal, technical, and fundamental indicators within the Energy, Grains, Meats, Softs, Metals and Currency markets. In addition, spread trade recommendations and follow-up on open trades is also provided. For a free copy of the Weekly Newsletter, please send an email to info@SpreadEdgeCapital.com
Darren Carlat
SpreadEdge Capital, LLC
(214) 636-3133
Darren@SpreadEdgeCapital.com
Disclaimer
SpreadEdge Capital, LLC is registered as a Commodity Trading Advisor with the Commodity Futures Trading Commission and is an NFA member. Past performance is not indicative of future results. Futures trading is not suitable for all investors, The risk associated with futures trading is substantial. Only risk capital should be used for these investments because you can lose more than your original investment. This is not a solicitation.
On the date of publication, Darren Carlat had a position in: LOX24 . All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
