intercommodity spread

(redirected from Inter-Commodity Spread)

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 ?
In addition to the CurveGlobal Three Month SONIA Future, CurveGlobal is introducing another market innovation with the listing of a simple native Inter-Commodity Spread contract (ICS) between the three-month SONIA and three month Short Sterling futures.
For financial players, we offer inter-commodity spread opportunities through our ingeniously designed spread trading engine.
This new inter-commodity spread trade market will be established on CME Globex between the London Spot Gold and Silver futures contracts and the active month of the COMEX Gold and Silver futures.
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."
Full browser ?