Futures Spread

An arbitrage technique in which a trader buys one commodity and sells another contract of the same commodity to capitalize on a discrepancy in prices.

In a futures spread, the goal is to profit from the change in the price difference between two futures contracts while hedging against risk. However, future spreads occur infrequently and when they can be identified, the opportunity for arbitrage is quickly removed though a shift of supply and demand conditions.


Investment dictionary. . 2012.

Look at other dictionaries:

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  • spread margin — An adjustment made to the calculation of initial margin which takes account of offsetting risks in futures contracts. Within the SPAN system two types of spread margins are calculated. Dresdner Kleinwort Wasserstein financial glossary 1. An… …   Financial and business terms

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