Please clarify your spreads quoting methodology. What is MRCI's convention and how can one be sure they are looking at the correct spread?
MRCI's convention has always been to quote the long side first. The industry does use/has used different methods, another being to always buy or sell a positive spread. Because our spreads are always seasonal, dependent upon rather than price, we chose our convention. One benefit is that, once the position is assumed, you always want its "graph" on the chart to go up.
Regarding the delivery month (e.g., Jan 2011 or Jan 2012) is used, it is always refers to that nearby at the time of entry unless explicitly stated otherwise. Consider the trade Buy Jan Nat Gas/Sell Sep Nat Gas. If entry is made, e.g., May 10, 2011, then the deliveries in question are Jan 2012 and Sep 2011. If, on the other hand, entry is made October 10, then deliveries in question are Jan 2012 and Sep 2012. If entry were to be May 10, 2011, and we wanted to use the Sep 2012 delivery, we would designate it as "Red" Sep.
In other words, at entry, the spread will always be between the nearest delivery of that month unless explicitly referred to as "Red" or, sometimes in the case of Eurodollars, "Green" (which designates two years deferred).
