Definition of Spread (or straddle)

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TeachMeFinance.com - explain Spread (or straddle)



Spread (or straddle)

The term 'Spread (or straddle) ' as it applies to the area of agriculture can be defined as ' The purchase of a futures contract of one delivery month against the sale of another futures delivery month of the same commodity; the purchase of one delivery month of one commodity against the sale of that same delivery month of a different commodity; or the purchase of one commodity in one market against the sale of the commodity in another market, to take advantage of a profit from a change in price relationships. The term spread is also used to refer to the difference between the price of a futures month and the price of another month of the same commodity. A spread can also apply to options contracts'.

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Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".


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