Intermarket Spread

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.

BREAKING DOWN '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. Interdelivery Spread

    Simultaneously entering a long and short on the same futures ...
  2. Intercommodity Spread

    Going long on one futures market in a given delivery month and ...
  3. Calendar Spread

    An options or futures spread established by simultaneously entering ...
  4. Spot Delivery Month

    The nearest month when a futures contract matures. The spot delivery ...
  5. Delivery Price

    The financial value of the conveyance of the underlying commodities ...
  6. Delivery Month

    A key characteristic of a futures contract that designates when ...
Related Articles
  1. Trading

    Futures Fundamentals: Strategies

    Essentially, futures contracts try to predict what the value of an index or commodity will be at some date in the future. Speculators in the futures market can use different strategies to take ...
  2. ETFs & Mutual Funds

    Introduction To Currency Futures

    The forex market is not the only way for investors and traders to participate in foreign exchange.
  3. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  4. Markets

    Commodities: Corn

    By Noble Drakoln"Corn" is an English word used to describe any type of grain. In many parts of the world, it is known as "maize," which was the name predominately used before grain was discovered ...
  5. Markets

    Investing in Crude Oil Futures: The Risks and Rewards

    Learn about the risks and rewards of trading oil futures contracts. Read about a few strategies to limit the risk in trading oil futures contracts.
  6. Investing

    Options on Futures

    Options on futures contracts offer another way for day traders to use options. These are traded on the same exchange as the underlying futures contract. Traders should take care to understand ...
  7. Markets

    How to Trade Futures Contracts

    Futures is short for Futures Contracts, which are contracts between a buyer and seller of an asset who agree to exchange goods and money at a future date, but at a price and quantity determined ...
  8. Markets

    I Can't Believe It's Corn!

    The widespread use of corn spans from food additives to fuel, aspirin and windshield washer fluid. Find out where else it's used and the size of this growing industry.
  9. Investing

    Is This Agriculture Trade Ready To Break Higher?

    For the past five years, investing in agricultural commodities has not been for the faint of heart. After rebounding quickly from the Great Recession on heavy demand from emerging markets, record ...
  10. Trading

    An Introduction To Trading Forex Futures

    We explain what forex futures are, where they are traded, and the tools you need to successfully trade these derivatives.
RELATED FAQS
  1. 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 >>
  2. What does it mean to take delivery of a derivative contract?

    Find out more about derivative contracts and what it means when the holders of derivative contracts take delivery of the ... Read Answer >>
  3. How do futures contracts roll over?

    Learn about why futures contracts are often rolled over into forward month contracts prior to expiration, and understand ... Read Answer >>
  4. What types of items can you buy futures for?

    Learn what items futures may be purchased for, what a futures contract is and discover how the futures markets have greatly ... Read Answer >>
  5. What is the difference between arbitrage and speculation?

    Arbitrage and speculation are very different strategies. Arbitrage involves the simultaneous buying and selling of an asset ... Read Answer >>
  6. How can a futures trader exit a position prior to expiration?

    A futures contract is an agreement to buy or sell a commodity at a pre-determined price and quantity at a future date in ... Read Answer >>
Hot Definitions
  1. Glass-Steagall Act

    An act the U.S. Congress passed in 1933 as the Banking Act, which prohibited commercial banks from participating in the investment ...
  2. Quantitative Trading

    Trading strategies based on quantitative analysis which rely on mathematical computations and number crunching to identify ...
  3. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  4. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  5. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  6. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
Trading Center