Intermarket Spread

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DEFINITION of 'Intermarket Spread'

The simultaneous purchase of a given delivery month of a futures contract on one exchange, and the simultaneous sale of the same delivery month of the same futures contract on another exchange in the hope the sale price is greater than the purchase price.

INVESTOPEDIA EXPLAINS 'Intermarket Spread'

Spread traders are only concerned that their long positions rise in value relative to their short positions. For example, a trader may purchase May Chicago Board of Trade Corn and simultaneously sell May Kansas City Board of Trade Corn (in the same year) in the hope the long position will increase in price and the short position will fall in price.

RELATED TERMS
  1. Intermarket Spread Swap

    A swap transaction meant to capitalize on a yield discrepancy ...
  2. Short (or Short Position)

    1. The sale of a borrowed security, commodity or currency with ...
  3. Delivery Month

    A key characteristic of a futures contract that designates when ...
  4. Long (or Long Position)

    1. The buying of a security such as a stock, commodity or currency, ...
  5. Intercommodity Spread

    Going long on one futures market in a given delivery month and ...
  6. Futures

    A financial contract obligating the buyer to purchase an asset ...
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