Example:Long December Unleaded Gas (HUZ) and Short August Unleaded Gas (HUQ) By trading this spread, you could easily have made933% on your margin in less than 30 days. READ OUR STUDENT FEEDBACK! What makes FuturesSpread Tradingsuch a profitable and easy way to trade?
Futures Spread (redirected fromFutures Spreads) Inarbitrage,thepurchaseof afuturecontractandthesimultaneoussaleofanothercontractonthesamecommoditywhenthepricediffers.Forexample,anarbitrageurmaytakeadvantageof asituationinwhichthepurchasepriceandthesalepriceof afuturescontractaredifferent.Inpractice,afuturesspreadisrela...
Trading futures spreads instead of outright position brings margin reduction. For example, when you are long August Crude Oil, your margin is around 2500$. Short May Crude Oil requires margin around 3000$. But when you create spread Long August Crude Oil - Short May Crude Oil, the margin do...
Consider a hypothetical example of an intermarket spread on municipal bonds (munis) over Treasury bonds, commonly known as the MOB spread. A trader learns that, although bonds in general tend to move in the same direction, historically for September futures, the price of municipal bonds has ...
What Matters Most When Trading Futures Contracts? Ultimately, depending on the trader, the futures broker characteristic that matters to one trader may matter more or less to another. For example, each trader’s preference on a platform can vary widely. Not every trader will agree on what he ...
Spread Trading:One strategy is to engage in spread trading, which involves taking long and short positions in different contracts within the same market. For example, an investor can simultaneously buy a near-month futures contract and sell a further-out futures contract. By taking advantage of ...
When it comes to making money from futures trading, the overarching objective is to correctly speculate on which way you think the markets will go. Asset valuations are based on supply and demand, this is often fueled by geopolitical events. For example, if OPEC decides to halt production leve...
The long hedger processor, for example, who buys raw material futures to satisfy his forward commitment of the processed good may find that the raw material delivered to him in futures is not of suitable grade and quality to meet the obligations of the forward sale. Quite often, therefore, ...
Forward Spread: What It Is, How It Works, Example By Cory Mitchell Jul 20, 2022 Futures Exchange: Overview of How it Works, History By Gordon Scott Feb 23, 2024 Initial vs. Maintenance Margin for a Futures Contract: What's the Difference?
A futures spread effectively provides a hedge againstsystematicrisk, allowing exchanges to reduce the margins for spread trading. For example, theChicago Mercantile Exchange (CME)has a $2,700 initial margin requirement for one contract of corn, as well as a $1,000 maintenance requirement for the...