intercommodity spread

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 underlying asset.

Notes:

Examples of intercommodity spreads include the crack spread (crude oil vs. unleaded gasoline) and the crush spread (soybean oil vs. soybean meal).

See also: Crack Spread, Crush Spread, Delivery Month, Futures, Intermarket Sector Spread, Intramarket Sector 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.

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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.