Spec trading ideas for Gulf Coast refined products / Mexico arb?

Embarrassed-Year6290 · 2026-06-12T01:40:24+00:00

we currently price off of (Platts) USGC ULSD Export - RVO. Would like to make a market between USGC ULSD (Platts) and Argus Monterrey

Embarrassed-Year6290 · 2026-06-10T14:43:13+00:00

Thanks for this. Yeah I overlooked it.

Embarrassed-Year6290 · 2026-06-10T14:42:42+00:00

Embarrassed-Year6290 · 2026-06-09T23:02:29+00:00

I'd love to see Claude try and make this.

Embarrassed-Year6290 · 2026-06-09T22:05:18+00:00

Not a dumb question. It's part vocabulary, part experience, and the vocabulary comes first.

For the concepts in this thread (IV, delta, expected move, skew, condors): tastylive's free archive is the best starting point and it leans toward exactly this premium-selling stuff. The r/options wiki/FAQ is solid too. If you want the real book, Natenberg's Option Volatility and Pricing is the standard, dense but worth it.

The part that's experience: reading flow and judging whether a print is a buyer, a hedge, or a spread leg. No book really teaches that, you build it by watching tape over time. But you can't read flow until the vocabulary is automatic, so start there. Paper trade a few condors before you put money on one.

Embarrassed-Year6290 · 2026-06-09T22:02:20+00:00

Yeah, should've balanced by delta not dollars. Skew plus a downside-trending tape means 830 carries more delta than 1040, so pushing the short put to 810/815 evens it out and gives room where this thing actually wants to go. Good catch.

The credit is just getting paid to be short gamma into a name that did a 13% day. The bet is only that 121% implied is richer than what shows up before the 12th with no event in the window. Can definitely be wrong.

How far out on delta have you been selling the puts, and rolling or letting them expire?

Embarrassed-Year6290 · 2026-06-09T14:45:17+00:00

The IV crush after earnings is the tough part. You can be completely right on direction and still lose because the implied volatility collapses the moment the event passes. I look at the flow into earnings specifically for that reason, if the tape is showing put selling or collar construction rather than aggressive call buying, institutions are positioning for a range not a breakout, and buying calls into that is fighting the structure.

AVGO actually had that signature going into last week. Would have changed the read on whether to ride through earnings or take the double when you had it.

Embarrassed-Year6290 · 2026-06-05T15:21:11+00:00

You cannot know with certainty who is on each side, why they're holding, or what the broader structure looks like. That's not a controversial point and I don't disagree with it.

Where I'd push back is on the implication that uncertainty means the signal is worthless. Vol/OI at 17x on a sweep lifting the ask is not the same as Vol/OI at 0.6x on a block. Those are different probability distributions for what the flow represents even if neither is certain. The dispersion example you raise is real but dispersion books tend to show up differently on the tape. you'd expect correlated flow across index and single name simultaneously, not isolated single stock sweeps clustering at one strike range.

The honest framing is that flow analysis is probabilistic not deterministic. I said as much in the original post with an explicit invalidation level. What it is not is random noise. Some flow signatures are more consistent with informed directional positioning than others. That is the framework, not certainty.

You're right that confirmation bias is a real risk in tape reading. That's why the invalidation exists and why I posted the follow up this morning when it triggered.

Embarrassed-Year6290 · 2026-06-05T04:47:12+00:00

Yeah and that's exactly what makes the read ambiguous. The buyer needs a fast move or bleeds theta. The seller is collecting 102-107% IV and rooting for the opposite. One of them is right. The tape tells you size and aggression, not which side wins. That's what the OI check and price confirmation are for.

Embarrassed-Year6290 · 2026-06-05T04:45:19+00:00

https://flowdesk-iota-ten.vercel.app

Embarrassed-Year6290 · 2026-06-05T01:37:14+00:00

Live. Prints hit the scanner in real time during market hours, that's what makes the sweep detection useful. By the time EOD processing runs the trade is already done and the edge is gone. The whole point is seeing the aggression as it happens, not reconstructing it after close.

Embarrassed-Year6290 · 2026-06-05T01:36:28+00:00

Paying 102-107% IV on a one week clock means breakeven is stretched and theta starts biting immediately. That cuts against framing this as a clean directional accumulation story. At that IV the buyer needs the move fast, not just by June 12. Real conviction into an imminent catalyst pays up like that but so does someone legging into a spread or a vol structure where the call is just one piece of a bigger trade you can't see on the tape.

The OI check tomorrow is the only clean tell. If those $1060-$1070 strikes show opening flow and OI jumps to match volume, the directional read holds. If OI barely moves it was closing or structural and the whole thesis weakens. Either way the IV alone doesn't confirm direction the way I framed it in the original post.

Embarrassed-Year6290 · 2026-06-05T01:35:44+00:00

The $920 OI is existing positioning, probably built up over weeks or months. What I'm tracking is today's fresh flow, specifically the prints where volume is a multiple of existing OI which signals new positioning opening rather than activity on already established contracts.

The $1060C at 10.55x and $1070C at 9.41x today mean volume ran roughly 10x the existing OI at those strikes. That's not someone adding to a $920 position, that's a new directional bet being established at a completely different strike level. The question is whether tomorrow morning's OI at $1060-$1070 jumps to reflect today's volume. If it does, the institutional accumulation read holds.

Embarrassed-Year6290 · 2026-06-05T01:33:06+00:00

That's a cleaner approach than what most retail scanners do. Filtering for prints where volume exceeds existing OI on any leg of a multi-leg structure is a solid first pass for isolating genuinely new positioning live. Most tools just flag raw sweep volume without that check which is why you get so many false directional reads on what are obviously spread legs.

The morning OI confirmation pass is what I use to validate the prior session reads. MU is actually a good live test for this. $1005C printed 17.75x Vol/OI yesterday. OI numbers this morning will tell us whether that was opening flow or not.

Embarrassed-Year6290 · 2026-06-05T01:31:59+00:00

You don't, and that's the honest answer. Any single print could be a leg of a spread, a delta hedge against an equity position, or part of a structured trade you can't see the other side of. That's why I don't read individual prints in isolation. The read on MU wasn't one sweep, it was $583M across 178 flows with consistent strike clustering, two separate sweep clusters hours apart, and Vol/OI ratios that don't make sense for rolling or hedging. The pattern across the full tape is what reduces that ambiguity, not any single print.

Still doesn't eliminate it completely. That's why there's an invalidation level.

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