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TOPIC: How to enter a spread trade?

How to enter a spread trade? 2 years 1 month ago #8

  • andy
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Hi Andy,

I have a couple of questions about how to enter a spread trade.

Let's have a look at the attached spread chart. The chart is updated to friday market close. Imagine that we want to enter the spread at the breakout of the RH.
How would you usually manage the spread entry in this case?

1) You will check the spread value 10 minutes before the 1:15 PM CT monday close and, if the breakout has been taken, enter the spread via MOC order
2) You will wait for the monday market closure and, if the breakout has been taken, you will wait also for the tuesday close to be sure that the market is moving in the right direction and you will enter the spread via MOC order on tuesday

Am I right that when you are referring to MOC orders, you are intending the closure of the regular trading session?

Thanks a lot for your time and your suggestions.

Regards
Jean

Answer

Hi Jean,

I would manage the entry the way you write under 1).

I try to use the regular trading hours for MOC.

Best,
Andy
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How to enter a spread trade? 1 year 11 months ago #14

  • Rahimseven
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MOC?

What the difference between spread and hedge?
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How to enter a spread trade? 1 year 11 months ago #17

  • andy
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It is very much the same. But when you trade a spread you enter/exit both legs usually at the same time.

When you do a hedge, often the second side follows later.

MOC = Market On Close

Best,
Andy
Last Edit: 1 year 11 months ago by andy.
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