Search Investopedia

Intermarket Spread

Filed Under » ,
Dictionary Says

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 Says

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 Definitions

  •

    Calendar Spread

    An options or futures spread established by simultaneously entering a long and short position on the same underlying asset but with different delivery months. Sometimes referred to as an ...
    Read More »

  • Delivery Month

    A key characteristic of a futures contract that designates when the contract expires and when the underlying asset must be delivered. The exchange on the futures contract is traded will ...
    Read More »

  • Futures

    A financial contract obligating the buyer to purchase an asset (or the seller to sell an asset), such as a physical commodity or a financial instrument, at a predetermined future date ...
    Read More »

    • 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 ...
      Read More »

    • Interdelivery Spread

      Simultaneously entering a long and short on the same futures contract but with different delivery months in the hopes that the price difference between the two months widens or narrows, ...
      Read More »

    • Long (or Long Position)

      1. The buying of a security such as a stock, commodity or currency, with the expectation that the asset will rise in value.2. In the context of options, the buying of an options ...
      Read More »

    • Short (or Short Position)

      1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.2. In the context of options, it is the sale (also known as "writing") of ...
      Read More »

    • Intermarket Spread Swap

      A swap transaction meant to capitalize on a yield discrepancy between bond market sectors. Intermarket spread swaps are based upon expectations of yield spreads between different bond ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions