PACK EXIT STRATEGYPACK EXIT STRATEGY

PACK VERSUS OUTRIGHTPACK VERSUS OUTRIGHT The excel snapshot is how to The excel snapshot is how to

hedge a pack (long) with an hedge a pack (long) with an outright (4 * short leg2) and how outright (4 * short leg2) and how to hedge to flat the position. you to hedge to flat the position. you can use this method to either exit can use this method to either exit from a pack, or you can price the from a pack, or you can price the whole package together as a unit. whole package together as a unit. Either way it’s a bonefied method Either way it’s a bonefied method to make good money. I will send to make good money. I will send each example, as each outright each example, as each outright creates different strategies. So if creates different strategies. So if you buy the pack (whatever pack) you buy the pack (whatever pack) and you sell the second outright. and you sell the second outright. you are flat outright exposure. To you are flat outright exposure. To exit the remaining position, you exit the remaining position, you need to sell 1 unit of the need to sell 1 unit of the ed1/ed2/ed3 butterfly (on jbus ed1/ed2/ed3 butterfly (on jbus and liquid) and buy 1 unit of the and liquid) and buy 1 unit of the ed2/ed4 6mth calendar (on jbus ed2/ed4 6mth calendar (on jbus and liquid)and liquid)

ED1 ED2 ED3 ED4

LEG1 LEG2 LEG3 LEG4

TRADE 1 1 1 1 1

TRADE 2   -4    

TRADE 3 -1 2 -1  

TRADE 4   1   -1

       

       

       

       

       

NET 0 0 0 0

PACK versus OutrightPACK versus Outright

Opposite you have Opposite you have the pack (long) the pack (long) versus 1 st versus 1 st (outright) short. To (outright) short. To exit you buy 1 exit you buy 1 ed1/ed4, buy 1 ed1/ed4, buy 1 ed1/ed3 and buy 1 ed1/ed3 and buy 1 ed1/ed2. again all ed1/ed2. again all liquid products liquid products quoted on JBUS.quoted on JBUS.

ED1 ED2 ED3 ED4

LEG1 LEG2 LEG3 LEG4

TRADE 1 1 1 1 1

TRADE 2 -4    

TRADE 3 1 -1

TRADE 4 1 -1

TRADE 5 1 -1    

       

       

       

       

NET 0 0 0 0

PACK versus OutrightPACK versus Outright

Opposite you have Opposite you have pack (long) versus pack (long) versus 33rdrd outright (short). outright (short). To exit you trade To exit you trade the following. Sell 1 the following. Sell 1 ed2/ed3/ed4 ed2/ed3/ed4 butterfly. And sell 1 butterfly. And sell 1 ed1/ed3. all these ed1/ed3. all these are liquid.are liquid.

ED1 ED2 ED3 ED4

LEG1 LEG2 LEG3 LEG4

TRADE 1 1 1 1 1

TRADE 2 -4

TRADE 3 -1 2 -1

TRADE 4 -1 1

TRADE 5  

     

       

       

       

NET 0 0 0 0

PACK versus OUTRIGHTPACK versus OUTRIGHT

Opposite is the Opposite is the pack (long) versus pack (long) versus 44thth Outright (short). Outright (short). To exit this To exit this strategy you strategy you simply sell 1 simply sell 1 ed1/ed4, sell 1 ed1/ed4, sell 1 ed2/ed4 and sell 1 ed2/ed4 and sell 1 ed3/ed4.ed3/ed4.

These are all very These are all very liquid spreads.liquid spreads.

ED1 ED2 ED3 ED4

LEG1 LEG2 LEG3 LEG4

TRADE 1 1 1 1 1

TRADE 2 -4

TRADE 3 -1 1

TRADE 4 -1 1

TRADE 5 -1 1

     

       

       

       

NET 0 0 0 0

Bundle versus PackBundle versus Pack As you can see you can hedge a bundle/pack As you can see you can hedge a bundle/pack

quite simply through the 12 month calendars. In quite simply through the 12 month calendars. In the example below you buy 2 yr bundle and sell the example below you buy 2 yr bundle and sell 22ndnd pack (red). To exit you simply sell 1 unit of pack (red). To exit you simply sell 1 unit of each the ed1/ed5, ed2/ed6, ed3/ed7 and ed4/ed8. each the ed1/ed5, ed2/ed6, ed3/ed7 and ed4/ed8. this is a great way of managing possies.this is a great way of managing possies.

LEG1 LEG2 LEG3 LEG4 LEG5 LEG6 LEG7 LEG8

  ED1 ED2 ED3 ED4 ED5 ED6 ED7 ED8

TRADE 1 1 1 1 1 1 1 1

TRADE         -2 -2 -2 -2

TRADE -1       1      

TRADE   -1       1    

TRADE     -1       1  

TRADE       -1       1

  0 0 0 0 0 0 0 0

conclusionconclusion

Many traders use this method to Many traders use this method to scalp packs and bundles all day long. scalp packs and bundles all day long. I think with your speed edge, plus I think with your speed edge, plus signal strength you can trade the signal strength you can trade the inside market of the packs and inside market of the packs and bundles, without having to worry bundles, without having to worry about having to sell the pack you about having to sell the pack you bought.bought.