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What is a Spread?

The term spread refers to a trading strategy that involves holding multiple related positions simultaneously.

Option Spread

An options spread is created by buying and selling two or more options on the same underlying asset. Spreads are commonly used to define risk, reduce premium cost, generate income, or express a specific market outlook.


Futures Spread

A futures spread involves simultaneously buying and selling related futures contracts. The contracts may differ by expiration month, underlying product, or market. Traders use futures spreads to speculate on price relationships rather than outright market direction.

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