May 2013 CUS Intercity Quotes – All 1 point Bid/Ask

To illustrate the potential of inter-city spread trades, I’ve posted 1.0 point bid/ask quotes for all ten CUS vs. Regional markets for the May 2013 (K13) contract that expires on May 27th. 

Inter-city spreads allow a trader to express a relative value view (as opposed to an outright view) between two regions for the same expiration.  In theory, since both parties are simultaneously entering a long and short overall risk may be reduced.  With several 1.0 point bid/ask spreads on the outright May ’13 contracts (e.g. BOS, CUS/HCI, LAV, LAX, and NYM) a) it’s a bit easier to get to 1.0 bid/ask spreads on some of inter-city quotes, and b) the inter-city quotes only impact a handful of the outright May 13 markets.

I’ve entered these as day orders to try and stimulate discussion on the overall topic of inter-city quotes -today.  Some traders have articulated strong views on the upcoming Case Shiller release.  This may be a less-risky opportunity for them to express their outlook.

If anyone wants to engage in a discussion about non-CUS pairs (e.g. BOS v NYM, LAX v SDG) for May, of for inter-city quotes on longer expirations,  I’d be happy to respond.  Please feel free to contact me (johnhdolan@homepricefutures.com).