Commodity Spreads Analysis Selection and Trading Techniques

Spread trading is the simultaneous purchase of one commodity futures contract and the sale of a different contract, and successful spread trading depends on careful analysis of prices and price movement. Today it's used by large commercial firms, to move their hedges from one contract month to another, to recover the costs of storing and financing their inventories, and to determine where to deliver a particular commodity. Large speculators are also heavy users of spreads. In fact, it's not uncommon for large companies and speculators to have a third or more of their positions in spreads. Yet, until now, there's been no reliable guide for traders who use spreads. This much-needed handbook is the first guide to analyzing spreads and spread price action, and discovering and executing profitable spread trades. It brings together, in one easy-to-use source, a wide range of both technical and fundamental methods for analyzing prices, as well as useful historical data on commodity price trends. Courtney Smith, an experienced user and long-time student of spread trading methods, explains every aspect of the commodity spread, from entering orders to sophisticated analysis. Traders will find guidance on applying historical comparison analysis, seasonal analysis, regression and correlation, and chart analysis...using intercommodity and intermarket spreads...and developing and using a spread trading plan. Many of these techniques and data have never before been published. All of it is grounded in the best current trading practice. As the first book-length treatment of spread trading methods, Commodity Spreads is an absolutely essential planning and trading guide for all commodity brokers, traders, and investors.