So i have noticed spreads on the QM (mini ny crude) tend to be pretty wide compared to the CL(Nymex pit traded). Spreads on the QM tend to be 2-3 ticks (5-7.5 cents) vs (1-3 cents) on the pit traded full size contract.
My question is is this margin already too tight or could a potential arb exist with someone on the floor os the nymex with a screen trader on the QM?
Im not sure how much size you really can pull off on the QM at a given level without having impact. Why is this descrepancy this large. Also im really not sure what the risks are. It seems like classic arb to me, granted one contract is 500 barrels and the other is 1000 barrels but thats easy always 2:1 ratio.
Anyone want to shed some light on this?
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