Spread trade

In finance, a spread trade (also known as relative value trade) is the simultaneous purchase of one security and sale of a related security, called legs, as a unit. Spread trades are usually executed with options or futures contracts as the legs, but other securities are sometimes used. They are executed to yield an overall net position whose value, called the spread, depends on the difference between the prices of the legs. Common spreads are priced and traded as a unit on futures exchanges rather than as individual legs, thus ensuring simultaneous execution and eliminating the execution risk of one leg executing but the other failing.

Spread trades are executed to attempt to profit from the widening or narrowing of the spread, rather than from movement in the prices of the legs directly. Spreads are either "bought" or "sold" depending on whether the trade will profit from the widening or narrowing of the spread.

Margin

The volatility of the spread is typically much lower than the volatility of the individual legs, since a change in the market fundamentals of a commodity will tend to affect both legs similarly. The margin requirement for a futures spread trade is therefore usually less than the sum of the margin requirements for the two individual futures contracts, and sometimes even less than the requirement for one contract.

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Latest News for: spread trade

Recovery Alert: Bitcoin Weekend Liquidity Shows Promising Surge in 2025

Bitcoin World 28 Mar 2025
Faster Trade Execution ... As adoption spreads across different time zones, weekend trading activity naturally increases ... Consider focusing more of your trading activity on Fridays to take advantage of potentially tighter spreads and faster execution.

Traders Fair 2025: Bringing Global Finance to Mexico City

Bitcoin World 28 Mar 2025
... trading and finance ... VT Markets, our platinum sponsor, is a trusted name in over 160 countries, offering a seamless trading experience with more than 1,000 tradeable instruments and ultra-low spreads.

Breaking: Binance Announces Surprise Listing of 4 New Crypto Tokens – MUBARAK, CZ’SDog, TUT, BANANAS31

Bitcoin World 28 Mar 2025
The official announcement, posted on Binance’s website, confirms that trading for these tokens will commence promptly at 9 p.m ... Be aware of potential price fluctuations and spreads, especially in the early stages of trading.

A world turned inside out

The Manila Times 28 Mar 2025
A global trade conflict implies a similar dynamic ... It is likely to have a lasting impact on the US and Chinese economies, and the contagion is almost certain to spread throughout the world through cross-border trade and capital flows.

AvaTrade launches online trading marketplace to enhance global access

Khaleejtimes 27 Mar 2025
With its advanced trading infrastructure, AvaTrade enables users to execute transactions with precision via its intuitive interface, robust security measures, and competitive spreads, ensuring a seamless and secure trading experience.

Car stocks slide as US tariffs spoil profit outlook

RTE 27 Mar 2025
Volkswagen, Europe's top car maker, is in the frame since 43% of its US sales are sourced from Mexico, S&P Global Mobility estimates, and even US marques were down in after-hours trade since their supply chains spread across North America.

Hyperliquid Ignites ETH Trading: A Revolutionary Leap for Crypto Spot Trading

Bitcoin World 27 Mar 2025
Why is ETH Trading on Hyperliquid a Game Changer? ... Higher liquidity translates to tighter spreads, faster order execution, and reduced slippage, all of which are crucial for efficient crypto spot trading.

Unveiling the Stunning Truth: Global Markets Dominate Bitcoin and Ethereum Trading, Leaving US Exchanges Behind

Bitcoin World 27 Mar 2025
the vast majority of Bitcoin trading and Ethereum trading actually happens outside of U.S ... Ethereum (ETH) Trading ... With trading activity spread across various regions, individuals around the world have greater access to cryptocurrencies.

Why AppLovin (APP) Shares Are Trading Lower Today

The Call 27 Mar 2025
The previous big move we wrote about was 17 days ago when the stock dropped 11% on the news that markets tumbled, extending the weakness from the previous week as concerns over the ongoing trade war continued to spread.

Dak Prescott to Browns Rumor Doesn't Make Sense

Newsweek 27 Mar 2025
A rumor is being spread about a potential trade of Dak Prescott to the Browns, but nothing about it makes sense ....

Officials told to hold special training sessions to encourage women entrepreneurs

The Hindu 27 Mar 2025
Govt. departments told to collaborate with independent industrial and trade bodies such as KKCCI to spread awareness ....

New Mexico Community College Hosting 4Th Annual Women In Trades Summit On Saturday

MENA FN 27 Mar 2025
(MENAFN - PR Newswire) Event spreads awareness of high-quality career opportunities in the skilled trades for women. ALBUQUERQUE, N.M., March 27, 2025 /PRNewswire/ -- Central New Mexico ... .

Stock market today: Asian shares sag after Trump raises tariffs on auto imports

Fox31 Denver 27 Mar 2025
Hyundai Motor Co.'s shares traded in Seoul lost 4.3% while Kia Corp.'s shares dropped 3.9% ... auto giants have already spread their production around North America following prior free-trade deals encompassing the United States, Canada and Mexico.

Reckless Trump leaves a world turned inside out

Gulf-Times 27 Mar 2025
It is likely to have a lasting impact on the US and Chinese economies, and the contagion is almost certain to spread throughout the world through cross-border trade and capital flows.

Stock market today: Wall Street slumps as Nvidia, Tesla and other Big Tech stocks drop

The Enterprise-Tocsin 27 Mar 2025
The S&P 500 sank 1.1% to break what had been a run of calmer trading ... auto giants have already spread their production around North America following prior free-trade deals encompassing the United States, Canada and Mexico.
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