This is a sample entry from Don DeBartolo’s email newsletter, Trade Spotlight: Spreads, published on Wednesday, October 5, 2016.
There is a bear futures spread trade opportunity in the Unleaded Gasoline market on a Trend Line breakout today. Establishing a bearish position where a front month contract is sold and a deferred month contract is purchased. Anticipating the spread to continue to widen negatively. Setting up a futures spread will potentially reduce the risk and volatility, as well as reducing the margin requirement, in this volatile energy market. This trade is in line with seasonal tendencies.
Sell the February 2017 / Buy the June 2017 RBOB spread at -.2125 using a limit order, GTC.
Entry is a break of today’s low. Initial Margin = $764 Maintenance Margin = $695
Stop loss: Stop loss is -.1995 points, above the twelve month contract high (10/04/16), GTC. (Risk: $546)
Target: Target is -.2500 points, a potential support level and where prices wear last year, GTC. (Profit: $1,575)
RBOB Spread Chart
Contact your Daniels Trading broker by phone or email to place this trade.
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STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
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