Chris and Pete answer viewer questions on Crude Oil (/CL) and Calendar Spreads.
All too often I’ll see /CL make a big move when it reopens at 4:30 pm est ... what causes this?
Aside from a perceived bullish slant to prices (back months higher than front months) in a contango curve in crude, what other factors contribute to contango being the "natural state" of the curve? I've heard carry costs, but I was curious what makes contango work as it does that people would be willing to pay more in the future months?
I would like to find if it is possible to create a calendar spread for options on crude oil futures (/CL). Since we would be dealing with different expiration crude futures in this case, would it be a good idea to generate a Theta positive and Vega positive trade to take advantage of a rise in volatility (OVX)? What are the pros and cons of this trade?