intercommodity spread

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Intercommodity spread

In the commodities market, a spread consisting of a long position and a short position in different but related commodities for example, speculating that the price relationship between the two commodities will change, e.g., platinum and gold.

Intercommodity Spread

A spread in which an investor creates an artificial position on a commodity in a certain state. One has an intercommodity spread when one buys a futures contract for a given delivery month and sells a futures contract for a different delivery month on the same commodity but in a different state. For example, an investor can take a long position in crude oil futures for one month and a short position in refined oil futures for another month. This allows the investor to create an artificial position on the price of refining oil. This particular intercommodity spread is called a crack. See also: Crush spread.

intercommodity spread

An investment position in which an investor purchases one commodity and sells short a related but different commodity. An example of an intercommodity spread would be the purchase of a futures contract in silver and the sale of a contract in gold.
References in periodicals archive ?
For financial players, we offer inter-commodity spread opportunities through our ingeniously designed spread trading engine.
Beginning April 8, electronic and floor trading hours for CBOT Corn, Soybeans, Wheat, Soybean Meal, Soybean Oil, Rough Rice, Oats, and KCBT Wheat futures and options, plus all related CBOT and KCBT calendar spread options and inter-commodity spread options, will be amended as follows:
In conjunction with clearing commodity contracts that support its clients' risk management needs, CME Clearing Europe offers margin efficiencies through inter-commodity spread credits where product pairs are price correlated, and offers margin offsets between its OTC WTI and Brent crude oil contracts, as well as its gasoil contracts.
Products included in the expanded hours are CBOT Corn, Mini-Sized Corn, Soybeans, Mini-Sized Soybeans, Wheat, Mini-Sized Wheat, Soybean Meal, Soybean Oil, Rough Rice, Oats, and Ethanol futures and options plus all related calendar spread options and inter-commodity spread options.
Electronic trading hours for CBOT Corn, Mini-Sized Corn, Soybeans, Mini-Sized Soybeans, Wheat, Mini-Sized Wheat, Soybean Meal, Soybean Oil, Rough Rice, Oats, and Ethanol futures and options plus all related calendar spread options and inter-commodity spread options will be extended to:
Effective May 20, 2012, for trade date May 21, 2012, electronic trading hours for CBOT Corn, Mini-Sized Corn, Soybeans, Mini-Sized Soybeans, Wheat, Mini-Sized Wheat, Soybean Meal, Soybean Oil, Rough Rice, Oats, and Ethanol futures and options plus all related calendar spread options and inter-commodity spread options will be extended to:
Inter-commodity spread margins for the NYMEX FCOJ and cotton futures contracts will be $300 for clearing members, $330 for members, and $405 for customers.
Furthermore, our market participants can also benefit from the margin offsets provided by DCCC for inter-commodity spreads.
0 release, Neovest now provides access to 104 global multi-asset markets and supports single-click futures trading, futures spreads, inter-commodity spreads, European equity options, and options on futures.
Applications for the new contract include on-the-run yield curve strategies, as well as inter-commodity spreads with CME Group's existing U.
In addition, CME Group will offer pre-defined, implied inter-commodity spreads on CME Globex for 3-Year Treasury Note futures versus other existing Treasury futures contracts.
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