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Closing the Gap - Futures Edition

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Crude: Through the Lens of FX

Closing the Gap - Futures Edition

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

In recent years, we have seen a strong, positive correlation between Canadian Dollar and Crude Oil prices. This is due to production of crude in Canada, supplying said oil to the US and its large reserves.

When looking at Crude in Canadian Dollar terms, we see an extreme in this relationship.

In another part of the world, Japan is particularly sensitive to changes in oil prices as it imports nearly all of its oil. Crude in Yen terms is also near highs.

With this information in mind, tastytrade constructs a pairs trade in Canadian Dollar and Japanese Yen. Find out how to set this up on a ratio, best practices for trade entry and management.

YEN Contract Specs
  • Symbol: /6J
  • Contract Size: 12,500,000 YEN
  • Delta: 12500000
  • Minimum Tick: $0.0000005
  • Tick Value: $6.25
  • Expiration: March, June, September, December
CANADIAN $ Contract Specs
  • Symbol: /6C
  • Contract Size: 100,000 CAD
  • Delta: 1000000
  • Minimum Tick: $0.00005
  • Tick Value: $5

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