Gasoline/Crude Oil Spread: A Stop In the Drop

Out With a Profit

On January 15th, the IMC blog entered a hypothetical short position in the RBOB gasoline/crude oil spread.  After some rollovers, we ended up in the August spread at the equivalent of $21.19 (premium gasoline).

August RBOB Gasoline Crude Oil spread daily

August RBOB Gasoline Crude Oil spread daily

On July 11th the position was liquidated at $13.34.  This was done because the spread had undercut price support between the January 13, 2015 low of $13.24 and the February 9, 2016 low of $13.20 and then reversed higher, triggering a Wash & Rinse buy signal.

The trade resulted in a profit of +$7,850 per spread.  We will now sit on the sidelines and wait until a new setup materializes.

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