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.
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It has 26 brokers who provide clients with continuous coverage of energy markets around the world including pre-trade intelligence and execution expertise of high volume trades, including blocks, inter-commodity spreads and complex option strategies.
Furthermore, our market participants can also benefit from the margin offsets provided by DCCC for inter-commodity spreads.
The TSE expects the upgrade to provide the market with lower latency and improved liquidity via the introduction of market making facilities as well as the introduction of inter-commodity spreads and closed auction facilities.
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