What factors determine the profitability of this trade

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Question

Derive the profit profile for an 'Intra' calendar spread trade with equal position sizes. What factors determine the profitability of this trade? Derive the profit profile for a tailed 'Intra' calendar spread and explain how this trade is different from one with one-to-one position sizes. What factors determine the profitability of: a butterfly in natural gas; a soy crush spread; and a currency tandem? (Hint: Use the profit profile for the trades to identify the factors and determine the positions needed when factors change in a particular direction.) Assume that you are convinced that the spread between the implied carry returns in silver futures and copper futures will narrow. How would you design a trade to profit on your predictive ability in this case?

Reference no: EM133495915

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