intramarket spread

intramarket spread definition - finance
A situation in which futures contracts for the same commodity are bought for one month and sold for another month. For example, August heating oil contracts are purchased, and September heating oil contracts are sold. Intramarket spreads are very common. Spread trades on most exchanges qualify for lower commission rates and lower margin requirements. Traders use intramarket spreads to make a profit in the future direction of prices. They also use this to roll over their position from one month to another. Also called interdelivery spread.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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