Continue reading...As we come into the growing season for many of our agricultural Commodities, there will be numerous opportunities to trade the volatility created by weather, crop estimates and other fundamentals. I mention the agricultural markets because they offer some of the finest opportunities. However, other markets can be spread, also.
For example, here are just a few:
Ten Year Treasury Note / Thirty Year Treasury Bond
Live Cattle / Lean Hogs
Euro FX / Aussie Dollar
Gold / Silver
Spreading offers the Futures trader an opportunity to trade these markets with less capital than on outright Futures position, while being hedged at the same time. This hedge does not mean you cannot lose money, it simply implies you are long one Futures contract at the same time you are short another in a related market. All of these Spreads are traded on exchanges and can be implemented by most Futures trading platforms. Since Spread trading involves trading two related markets, you will be required to pay a...
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