LD Lossdog Research
strategy

spread trading

2 matching records.

Trade idea

silver spread trading

The speaker suggests that the spread between gold and silver is a false hedge, as it has fluctuated significantly over time. The speaker indicates that the spread was previously $51 but has since dropped to lower levels, suggesting that the hedge is not reliable. The speaker also mentions that trading copper against silver might be a better alternative, but acknowledges that copper is less liquid and has wider options, requiring caution.

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Strategyspread trading
Assetcommodity
Time horizonshort-term
Entry / triggerwhen the spread between gold and silver is at a high level
Target / exitthe spread reverts to a lower level
Invalidation / stopif the spread continues to widen beyond historical levels
Speakerspeaker
Risks
  • The spread may continue to widen beyond historical levels
  • The liquidity of copper is lower than that of silver
  • The options for copper may be wider, increasing the risk of large losses
shortcommodityshortspread tradingshort-termsilver
medium confidenceVerify in video at 09:24 ↗
Q&A

Should traders buy or sell volatility directly when trading spreads?

The transcript suggests that traders should consider buying directionally rather than selling volatility directly when trading spreads. The speaker emphasizes that the choice between buying and selling volatility depends on the trader's comfort level and the specific market conditions, such as volatility levels and skew.

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Actionable takeawayTraders should evaluate their comfort level and market conditions when deciding between buying and selling volatility in spread strategies.
spread tradingVolatility
high confidenceVerify in video at 51:20 ↗