Intercommodity Spread

DEFINITION of 'Intercommodity Spread'

Going long on one futures market in a given delivery month and simultaneously going short on the same commodity and delivery month but a different futures market but with similar underlying asset.

BREAKING DOWN 'Intercommodity Spread'

Examples of intercommodity spreads include the crack spread (crude oil vs. unleaded gasoline) and the crush spread (soybean oil vs. soybean meal).

RELATED TERMS
  1. Calendar Spread

    An options or futures spread established by simultaneously entering ...
  2. Crush Spread

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  3. Current Delivery

    A type of futures contract that requires the delivery of the ...
  4. Intermarket Spread

    The simultaneous purchase of a given delivery month of a futures ...
  5. Delivery Point

    In futures contracts, the delivery point is the place where the ...
  6. Delivery Price

    The financial value of the conveyance of the underlying commodities ...
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RELATED FAQS
  1. How do I learn technical skills for trading commodities?

    Learn what resources are available to learn about trading commodities, and understand some of the differences between stocks ... Read Answer >>
  2. What's the difference between cash-on-delivery differ and delivery against payment?

    Find out more about cash on delivery and delivery versus payment transactions and the difference between these two types ... Read Answer >>
  3. Why do futures' prices converge upon spot prices during the delivery month?

    It's a fairly safe bet that as the delivery month of a futures contract approaches, the future's price will generally inch ... Read Answer >>
  4. How do I set a strike price in an options spread?

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  5. What are common factors that affect a security's spot rate?

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  6. What's the difference between a credit spread and a debt spread?

    Learn about debit and credit option spread strategies, how these strategies are used, and the differences between debit spreads ... Read Answer >>
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