Futures Spread Trading

Spread trading in the futures market has been around for years, but it may be a new concept to individual investors. It entails selling a futures contract and immediately buying another contract to offset the sale. You can engage in intermarket spread trading, which involves futures contracts for two different products.

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Another type of trading, referred to as intramarket spread trading, involves the buying and selling of futures for the same product, but for different expirations. While it may seem as though you are simply conducting multiple transactions, there are many benefits to these types of transactions. One of the key benefits of intramarket spread trading is that the margins you must pay are often substantially less than you would need to pay for one of the futures contracts.

Optioneer offers an alternative to futures spread trading. We offer a risk managed approach to selling options on index futures. By selling only the option instead of the futures, risk can be better managed over time, margins can be kept smaller and multiple trades can be easily managed simultaneously.

Advantages to Spread Trading Futures Contracts

For both intermarket and intramarket spread trading, there are additional benefits compared to purchasing futures outright, such as:

  • When the price changes little, there can still be a more significant change in the spread.
  • These trades may be less risky than just purchasing a futures contract.
  • If you are considering trading options on futures, the Optioneer program can provide you with insight into the value of potential transactions.

Rather than spending copious amounts of time analyzing the risk and potential rewards of a spread trade, the Optioneer method can enable you to make a decision in minutes. Unlike some investment systems you may come across, more than 20 years of experience and testing went into the development of the Optioneer program. To find out more about how you can use it to guide your investing, call us today at 800-845-2502 or email us at info@optioneer.com.