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Unleaded Gasoline and Natural Gas Futures

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Today I wanted to show you a couple of my favorite markets that not many traders are aware of… Unleaded Gas and Natural Gas Futures.  Yesterday using the PTU 2.0 system we went 2-1 trading Unleaded Gas Futures for a profit of $582/contract traded! Unleaded Gas Futures uses the symbol RB – and you can read more about this contract here:

http://www.cmegroup.com/trading/energy/refined-products/rbob-gasoline_contract_specifications.html

What many traders don’t realize is this market is trading really smooth. Compare a chart even with a favorite market such as Crude Oil Futures and you’ll see the Unleaded Gasoline RB Futures are surprisingly smooth. I like to use range (or momentum) bars to chart this market and you can see in the chart we’re using a momentum bar of 40 ticks per bar. The tick value is $4.20 per tick and the typical targets now are about 120 ticks or thereabouts. If you decide to look further into this market you’ll find the volume is certainly providing plenty of liquidity but the bid/ask is going to be wider than Crude Oil or even Natural Gas Futures. I suggest allowing up to 4-5 ticks slippage on stop entry. Consider with a target of 100+ ticks it’s a small price to pay to execute.

[Keep in mind, you can click the chart thumbnails below for a full sized image]

Gasoline Futures (RB)

10/29 – Unleaded Gas Futures traded with PTU 2.0 – 2 wins, 1 loss

Today in less than 5 minutes, we were able to get our win with Natural Gas Futures for $200/contract traded using the PTU 2.0 system. Natural Gas Futures (NG) is another favorite in particular since it trades basically in a “half size” to the Crude Oil Futures markets. It’s a great starter market as well in energy futures but provides plenty of scale opportunities as well. The tick value is $10/tick just like Crude Oil Futures but a typical risk on this market might be 15 to 18 ticks where a Crude Oil Futures trade might have 30 to 35 tick risk. Hence the half size that I’m mentioning. Plus, this market can move quickly and many sessions you can be done in just a few minutes if things break our way quickly.

Natural Gas Futures

10/30 – Natural Gas Futures traded with PTU 2.0 – 5 minute win – $200/contract

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