Joe Ross' Spread Scan Newsletter

You have subscribed to Joe Ross' Weekly Spread Scan Newsletter.
If you have problems reading this newsletter, please follow this link:
Spread Scan Issue: August 07, 2007 - Volume 156

This email was sent to you by Trading Educators.
To ensure delivery to your inbox (rather than to bulk or junk folders)
please add info@spread-trading.com to your address book.

To unsubscribe, scroll past the end of this newsletter and
click the "unsubscribe" link.

Otherwise, welcome to this week’s issue of the
Joe Ross Spread Trading Newsletter.

Each week we present spread trading examples and opportunities in order to help
you become a more professional spread trader.

Andy's Spread Scan Example:

This week we look at 2*CZ7 – SX7.

Today we consider an inter-market spread: long 2 December 07 Corn and short 1
November 07 Soybeans (2*CZ7 – SX7). After trading sideways in April and May, the
spread broke out to the downside at the end of June. It seems the spread has found its bottom at around -210 after trading sideways in July. The seasonal time window
is very short (app. 7/20 – 8/10) and therefore this trade is only for more aggressive traders with big accounts.

Traders may want to enter the spread Market On Close (MOC) today. Margin for the
spread is $5,130 (no reduced margin). Suggested risk is $1,500. Initial projected
objective is $1,500, then a move higher. Basis is seasonal (app. 7/20 – 8/10) and
a Rh. Comment: The ratio of this spread is 2:1 (2 long : 1 short). Remember, this spread is only for traders with larger accounts!

Previous Trades:

Andy Jordan's Trading Bites

Student's Question: "Andy, what markets are you trading and why?"

Andy: I am trading mainly the Chicago markets using CME and CBOT. I prefer these markets for several reasons:

- Chicago markets are more trader friendly, i. e. if you give a market order in Chicago
it has to get filled in a specific amount of time (as far as I remember it allows the guy in the pit 5 minutes to fill your order). Such a rule does not exist in N.Y., and you can imagine what this means to your fill.

- Normally you get much less slippage in Chicago than in NY. Try to leg in via a market order in any energies spread and you will see what I mean. Even if the markets are liquid, you can get a terrible fill in N.Y.

- Exchange rules in Chicago are much stricter than in N.Y., meaning you get much
better treatment in Chicago because the exchange traders are held to more stringent standards.

- I am personally not able to follow ALL possible markets. I am concentrating on
the grains, meats, soy complex, interest rates, and the currencies, and this is really
enough. For my trading I like to have enough markets available to find good trades,
but I also try to understand each market's individual behavior.

Nowadays almost all markets are electronic, and therefore it is much easier for us
to trade them (immediate fills, information about the bid and ask,...). Even the
New York markets like energies are ok for trading now, as long as you stay away
from open outcry.

back to top


You have subscribed to Joe Ross' Weekly Spread Scan Newsletter. If you have problems reading this newsletter, please follow this link: Spread Scan Issue: August 07, 2007 - Volume 156 This email was sent to you by Trading Educators. To ensure delivery to your inbox (rather than to bulk or junk folders) please add info@spread-trading.com to your address book. To unsubscribe, scroll past the end of this newsletter and click the "unsubscribe" link. Otherwise, welcome to this week’s issue of the Joe Ross Spread Trading Newsletter. Each week we present spread trading examples and opportunities in order to help you become a more professional spread trader. Andy's Spread Trading Example Previous Trades Andy Jordan's Trading Bites Beginners Course For Futures Trading Spread Trading Live Seminars with Joe Ross Contact Us Be sure you receive all your issues of Spread Scan so that you can continue to enjoy learning through the best free educational trading information available, and so that we can keep you informed about additional educational services and products to help you grow as a successful and profitable spread trader.
Andy's Spread Scan Example: This week we look at 2CZ7 – SX7. Today we consider an inter-market spread: long 2 December 07 Corn and short 1 November 07 Soybeans (2CZ7 – SX7). After trading sideways in April and May, the spread broke out to the downside at the end of June. It seems the spread has found its bottom at around -210 after trading sideways in July. The seasonal time window is very short (app. 7/20 – 8/10) and therefore this trade is only for more aggressive traders with big accounts. Traders may want to enter the spread Market On Close (MOC) today. Margin for the spread is $5,130 (no reduced margin). Suggested risk is $1,500. Initial projected objective is $1,500, then a move higher. Basis is seasonal (app. 7/20 – 8/10) and a Rh. Comment: The ratio of this spread is 2:1 (2 long : 1 short). Remember, this spread is only for traders with larger accounts! back to top
Previous Trades: On July 25 we told subscribers of our professional daily spreads & position trading newsletter Traders Notebook, "Consider entering a calendar spread CH8 – CN8 at a spread value of -19 ¼. Margin for the spread is $203 (reduced margin). Suggested risk is $200. Initial projected objective is $200, then a move up to -4 or higher. Basis is correlation and a 1-2-3 low. Comment: Even if the 1-2-3 low is not correct by definition (#3 is at the same level as #1), it looks ok to me. My trading idea would be to put on ½ of my position first and add on later." Here's how we suggested managing this trade: 07/26 Suggest entering MOC tomorrow. 07/27 In? For more information about our daily newsletter, visit our Spread Website to find out more about Traders Notebook Questions or Comments? Please email us: support@spread-trading.com
Andy Jordan's Trading Bites Student's Question: "Andy, what markets are you trading and why?" Andy: I am trading mainly the Chicago markets using CME and CBOT. I prefer these markets for several reasons: - Chicago markets are more trader friendly, i. e. if you give a market order in Chicago it has to get filled in a specific amount of time (as far as I remember it allows the guy in the pit 5 minutes to fill your order). Such a rule does not exist in N.Y., and you can imagine what this means to your fill. - Normally you get much less slippage in Chicago than in NY. Try to leg in via a market order in any energies spread and you will see what I mean. Even if the markets are liquid, you can get a terrible fill in N.Y. - Exchange rules in Chicago are much stricter than in N.Y., meaning you get much better treatment in Chicago because the exchange traders are held to more stringent standards. - I am personally not able to follow ALL possible markets. I am concentrating on the grains, meats, soy complex, interest rates, and the currencies, and this is really enough. For my trading I like to have enough markets available to find good trades, but I also try to understand each market's individual behavior. Nowadays almost all markets are electronic, and therefore it is much easier for us to trade them (immediate fills, information about the bid and ask,...). Even the New York markets like energies are ok for trading now, as long as you stay away from open outcry. back to top
Beginners Course for Futures Traders Electronic E-book Version Start Your Trading Business on the Right Foot We offer a great online trading course you need to study for successfully operating your trading business in today's markets. Study it now, whether you are new to trading or an already seasoned trader. The course "From the Beginning" has information for traders of all levels, from beginners all the way through to advanced. The course includes fundamental detailed information about this business that most traders do not know, and are unaware that they need to know. IF YOU'RE LUCKY YOU MIGHT FIND THIS INFORMATION IN BOOKS, BUT you might have to read through thousands of pages to get it. However, in the e-book "From the Beginning," you will find the answers all in one place. You can increase your chances for trading success when you know and understand the business of trading. The more you know, the better off you will be. You need to know the rules and the players; you need to know what can hurt you and what can help you. Follow this link for more detailed information and to order YOUR COURSE "From the Beginning" NOW!
Upcoming Spread Trading Seminars Live with Joe Ross Spread Seminar in Ravenna, Italy November 9-10, 2007 Click here to link to our Italian seminar site to sign up for Joe's Spread Trading Seminar in Ravenna Presented by Joe Ross and Francesco Fabi ----------------------------------- Spread Seminar in Munich, Germany November 28-29, 2007 Click here to link to our German seminar site to sign up for Joe's Spread Trading Seminar in Munich Presented by Joe Ross and Karsten Kagels
View last week's Spread Scan # 155 - August 01, 2007
© 2007 by Trading Educators, Inc Contact Us 1509 Jackson Drive Cedar Park, TX 78613 Phone: 800-476-7796 or 512-249-6930 You can e-mail us: support@spread-trading.com Office hours are Monday - Friday 9 A.M. to 5 P.M., U.S.C.T. back to top
Unsubscribe or change subscription To change your subscription or to unsubscribe, scroll past the end of this newsletter to click the "unsubscribe" link.
Disclaimer: The Commodity Futures Trading Commission has asked us to advise you that trading spreads is complex and carries a high degree of risk. While there is opportunity for incredible wealth building, there is also the risk of losing even more than you invested. Of course, that's not unlike most other businesses. But informed traders are the best traders!