Spread (or Straddle)

What is Spread (or Straddle)?

Spread (or Straddle) meaning The purchase of one futures delivery month against the sale of another futures delivery month of the same commodity; the purchase of one delivery month of one commodity against the sale of that same delivery month of a different commodity; or the purchase of one commodity in one market against the sale of the commodity in another market, to take advantage of a profit from a change in price relationships. The term spread is also used to refer to the difference between the price of a futures month and the price of another month of the same commodity. A spread can also apply to options. See Arbitrage.

 

reference: U.S. COMMODITY FUTURES TRADING COMMISSION – CFTC Glossary