Question
What contract ratios are used in MRCI's spread recommendations?
Answer
Unless explicitly stated otherwise, all MRCI spread research uses a standard 1:1 contract ratio.
This means one contract is bought for every one contract sold.
Why Does MRCI Use a 1:1 Ratio?
In some intermarket spreads, the underlying contracts may differ in both price and contract size. This naturally raises the question of whether positions should be adjusted or "weighted" to create a more balanced exposure.
For the sake of simplicity—and because the futures industry traditionally quotes these spreads based on their nominal price differences—MRCI has chosen to present spread opportunities using a 1:1 ratio.
Are There Exceptions?
Yes. If a spread recommendation requires a ratio other than 1:1, MRCI will clearly state the appropriate contract ratio within the analysis.
Summary
As a general rule:
- MRCI spread recommendations use a 1:1 ratio.
- One contract is bought for each contract sold.
- Alternative ratios are specifically identified when necessary.
- Spreads are quoted according to industry conventions and nominal price relationships.
Using a consistent 1:1 format helps simplify spread analysis and allows traders to compare opportunities more easily across different markets.
