DEFINITION of '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, depending on the underlying investment.

BREAKING DOWN 'Interdelivery Spread'

Spread traders are only concerned that their long positions rise in value relative to their short positions. For example, if a trader is long June corn and short August corn, then the trader is hoping that the price of June corn rises and the price of August corn falls.

RELATED TERMS
  1. Basis Quote

    Basis quote refers to a quote given on a futures contract expressed ...
  2. Corn/Hog Ratio

    The corn/hog ration is a feed ratio used to determine the profitability ...
  3. Futures Spread

    A futures spread is an arbitrage technique in which a trader ...
  4. Ratio Spread

    A ratio spread is a neutral options strategy in which an investor ...
  5. Short Leg

    A short leg is any contract in an options spread in which an ...
  6. Net Long

    Net long refers to a condition in which an investor has more ...
Related Articles
  1. Insights

    6 Countries That Produce the Most Corn

    The world's six major producers of its most popular grain, corn, include the United States and China. Learn if these producers are net importers or exporters.
  2. Investing

    Corning’s Upcoming Earnings: What to Expect

    After consecutive earnings beats, the high-tech glass manufacturer may surpass expectations.
  3. Investing

    Investing Seasonally In The Corn Market

    Each month can bring new growth opportunities, if you know where the right investment seeds are.
  4. Investing

    Corning Releases New Glass-Enabled Concept Car

    The high-tech Gorilla Glass maker foresees 'exciting new opportunities' in the evolving auto space.
  5. Investing

    Strategic Traders Are Turning To Agriculture

    As summer approaches many commodity traders are looking for opportunities at the agriculture sector. We'll take a look at a few picks for how to trade the move higher.
  6. Investing

    Corning and Belden Collaborate on Broadband

    The high-tech glass specialist will work with PPC Broadband to enhance networks.
  7. Investing

    Agriculture Commodities Are In The Bear's Sights

    Agriculture stocks have experienced strong moves higher over recent weeks, but chart patterns on sugar, corn and wheat are suggesting the moves could be short lived.
  8. Trading

    Trading Calendar Spreads in Grain Markets

    Futures investors flock to spreads because they hold true to fundamental market factors.
RELATED FAQS
  1. What is the difference between a short position and a short sale?

    Learn how short selling and short positioning are different, specifically in regards to the nature of the commodity being ... Read Answer >>
  2. Why do futures' prices converge upon spot prices during the delivery month?

    Learn why as the delivery month of a futures contract approaches, the future's price will generally inch toward or even come ... Read Answer >>
  3. How long should you hold on to a short?

    Explore the reasons for short selling and the various factors that influence how long an investor may wish to maintain a ... Read Answer >>
  4. How long can you short sell for?

    In theory, you could keep a short position open indefinitely, but in practice, a lender can demand you "buy to cover" the ... Read Answer >>
  5. How does one make money short selling?

    Short sellers make money by betting a stock they sell will drop in price. If it drops, the short seller buys it back at a ... Read Answer >>
Hot Definitions
  1. Futures Contract

    An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
  2. Yield Curve

    A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but ...
  3. Portfolio

    A portfolio is a grouping of financial assets such as stocks, bonds and cash equivalents, also their mutual, exchange-traded ...
  4. Gross Profit

    Gross profit is the profit a company makes after deducting the costs of making and selling its products, or the costs of ...
  5. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  6. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
Trading Center