Over the last week the spot price has dropped over a dollar, while the November futures contract hasn't moved. With the Nov contract closing at about 4.72, this has resulted in a $2.40 spread between the spot price and near-month futures contract, which by the way has only 25 days left until expiry.
Here's a graph I found showing that this is the largest spread in over 3 years (and I bet even longer) - check out our spike on the right:
Link is from this article: http://www1.hymarkets.com/html/news/2009/10/2/1254509240nN02332141.html
I've been scouring the latest news stories & blogs, and no one is offering any real explanations. They're all basically saying, "wow, there's a crazy spread" and that's it.
This premium cannot last another week, so it seems like an opportunity of a lifetime to make money. When the markets open Sunday evening, I'm going to try to sell another Nov e-mini contract -- or two -- at anything I can get above 4.50. I doubt it will fill because the price will likely open lower than that.
2 comments:
I agree, this is crazy. What's interesting too, is that the last two spikes in the spread happened at around the same time. The first big spike was exactly the same, right in October, and the second one looks to be a little bit later, in Nov. Co-incidence? It might be interesting to see what the spot price did around those last two spikes.
Good point. You spurred me into looking into the price history, and what I saw is not good :) I'll talk about this next post. From reading other message boards, it seems too risky to do anything right now.
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