Focus on Seasonality with Futures!
As the seasons change, so too do the markets! Have you ever thought about how the seasons can affect the markets? Seasonal futures trading is a trading strategy that involves taking positions in futures contracts based on the anticipated seasonal patterns or fluctuations in prices of certain commodities or financial instruments. We’ll teach you how to navigate this popular approach to agricultural commodities like wheat, corn, soybeans, and livestock, where prices tend to follow seasonal cycles due to factors like planting and harvesting seasons, weather conditions, and supply-demand dynamics.
There are a couple ways to capitalize on Seasonality in the Futures market. Going long or short on the outright contract is one. That can be very risky, and margins are high. The other way is to spread one contract against another which is less risky and has favorable margin treatment. That’s where we will focus!
Spreading is a well-known strategy used by institutional and commercial traders but is relatively unknown outside of those circles. The strategy for Spreading in the futures market involves buying and selling one or more futures contracts simultaneously, (a hedge) to profit from the price difference between them as it expands or contracts over time. Combining spread trading with seasonality in the futures markets involves identifying and leveraging seasonal patterns in the price behavior of related futures contracts.
We’ll also look at inter-market and intra-market spreads, each targeting different price differences to give you a masterful approach to Spread Trading. What will this harvest season have in store? Find out by joining our Focus Showcase on September 18th at 9am PT and join Craig Weil as he shows you the elegant opportunity associated with Spread Trading Futures contracts!
The Focus Showcase can be accessed from the calendar in My OTA…all students are welcome to attend!