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SC KS | Not to get too hung up on what terminology people use, but spread should be a fairly generic term. Here's how CME describes a spread: Spreading, a trade in which you simultaneously buy one futures contract and sell another, is a popular strategy among many different asset classes. Now if it's a currency vs. a livestock contract I agree that's not a spread, just flat price speculation. Even then, often certain areas get expensive vs. others and there is risk reduction for shorting the expensive market vs. being long undervalued ones.
In this case we're talking the same asset class though. I don't focus on livestock as much as other complexes, but to me there's a fundamental tie between cattle and hogs. They are substitute products and at the end of the day this should manifest itself on the future board. Seems like we'll have different viewpoints on this one. | |
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How wide can hog/cattle spread get?
