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Derivatives




Spread Transaction


A transaction in which the trader simultaneously purchases, or takes a long position in, a contract on a specific asset for some maturity month and sells, or takes a short position, in another contract on the same asset for another maturity month. For example, a spread transaction may involve the purchase of one futures contract against the sale of another futures contract with a farther dated contract month.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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