Updates: Prices/ “Stir the pot: LAX”

I’ve posted a recap of price changes since month-end (through Friday) in the reports section (or here).

Through Friday Nov 11 bids are up and offers lower with most of the bid/ask spread compression showing up in longer-dated LAX contracts  (e.g. LAXX17 closed Friday 250.0/258.0 versus  244.2/261.6 at month-end.)

One of the factors helping to reign in LAX spreads is a -39.0/-35.0 intercity quote in CUS_LAX_X16 spreads.  The combination of a 3 point bid/ask spread in CUSX16 and the 4 point IC spread means that LAXX16 cannot be wider than 7 points.  Thus anyone contributing to tighter (or deeper) CUSx16 markets, or tighter (or deeper) intercity spreads, indirectly contributes to tighter LAXX16 markets.  So, even if you don’t have a view on LAX, contributions to CUS can help.

BTW- the CUS_LAXX16 IC spread works out to about a -1%/+1% outperformance of CUS vs. LAX by Nov 2016.

If you have any views on CUS, LAX, or IC spreads, feel free to post quotes and/or contact me at johnhdolan@homepricefutures.com