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August 13, 2020
Hot Rolled Futures: Selling HRC Futures Continues to be the Winning Strategy
Written by David Feldstein
Editor’s note: SMU Contributor David Feldstein is president of Rock Trading Advisors. David has over 20 years of financial market trading experience and has been active in the ferrous futures space for eight years. David earned an MBA from the University of Chicago Booth School of Business with concentrations in economics, statistics and analytical finance.
The chart below is the CME Midwest HRC futures curve in a steep upward sloping contango. A futures curve is in contango when futures prices are higher than spot prices. CME Midwest HRC futures are financially settled against the CRU Midwest HRC Index. There is no physical settlement or physical steel involved. To read this chart, find the future’s month on the X-axis and the corresponding price on the Y-axis on the right. While this chart only goes out through March 2021, futures are available for every month out for three years from the current month.
