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Ricardo Rasche's avatar

I'm also putting on a position - short NQ, long RTY going into CPI day tomorrow.. what are your thoughts on using longer-dated CL contracts to offset NQ shorts as well? NQ/RTY more correlated but CL is definitely tempting.. if good idea, how would you size? I've been using IV-adjusted notional values

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Kevin Muir's avatar

Hey Ricardo - you're really strapping on the correlation / relative value trades!

For me, this is the first day of a bounce in NQ - meaning this was the first day it led. I like giving it a few days before I fade the strength, so I am waiting still.

What I am really hoping for is a 20% rip higher in ARKK. I'm no longer short and everyone seems to be leaning on it. I think that thing could explode (but don't get me wrong, a year from now it's going to get halved again I think).

How far out are you going in CL? The really far-dated stuff has got a wide bid/ask and it doesn't move. Are you just talking this Christmas? Or like Dec 2023?

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Ricardo Rasche's avatar

Hey Kev - lol, not strapping on in size yet but looking to initiate position before CPI tomorrow since I believe thereтАЩs some potential for upside surprise. Too tempting. For CL, I mostly like Dec 2023 but sometimes also 2024 if holding longer term

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Kevin Muir's avatar

I am going to do some work on the correlations with those longer-term CL contracts. I am just straight out long and letting them cook. I never thought about trading them. You might have unleashed a madman now! :)

Thanks! Have a great night,

Kev

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