Was reading an article today that suggested you could gain the spread by going short on the furthermost furues contract, and long the current one.
If you look at WTI that is about a 40 pip spread. Any thoughts?
The idea is that "...the futures price is above the expected future spot price. Because the futures price must converge on the expected future spot price, contango implies that futures prices are falling over time as new information brings them into line with the expected future spot price."
I can't see how this would help in a £ per pip scenario as the underlying movement is exactly the same?
Quote from an online broker: "A lot of people trade the calendar spread by going long in one monthly contract and short in another..."
If you look at WTI that is about a 40 pip spread. Any thoughts?
The idea is that "...the futures price is above the expected future spot price. Because the futures price must converge on the expected future spot price, contango implies that futures prices are falling over time as new information brings them into line with the expected future spot price."
I can't see how this would help in a £ per pip scenario as the underlying movement is exactly the same?
Quote from an online broker: "A lot of people trade the calendar spread by going long in one monthly contract and short in another..."
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