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Future spread

Posted by Svetlana Tokunova
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Futures spreads combine both short and long positions (called legs) at the same time in related futures contracts. Spread volatility is lower than short or long positions held individually since prices of related contracts tend to move in the same direction and changes in the commodities fundamentals will affect both legs in equal manner.

Futures spreads, depending on which contracts are bought or sold, are either bull or bear.

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