Prompt lumber continues to carry a premium over March Lumber Futures which is May arrival of inventory. It’s called futures for a reason and although it’s a great barometer of market sentiment, it’s ability to be irrational longer than most can survive is why it’s a difficult tool to use. It’s a great trend indicator a but difficult for the average joe trader to participate unless you have a lot of money and have a big risk appetite.You can be 100% right in the market but lose all your money. I would like to see a contract that was maybe broken down into trucks instead of cars which would attract more users and make it more accessible to smaller traders. I think this would also provide increased liquidity which can be an issue while trading a commodity with such low open interest. It’s basically turned into a game for wealthy investor groups.
I hope this doesn’t offend any Cat Lovers. I don’t enjoy cats but if you do that’s your choice. Have an Awesome Day!!
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This is a great idea! I think there is lots of room for innovation within the contract market & this idea would be a great way to open up the contract market to more players …
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And thank you for posting the “dead cat bounce” article… very informative and educational! The dead cat bounce is very common in lumber markets, yet few keep an eye out for it…
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