Trading the gold/silver spread

13 September 2010 | 04:11 Code : 20174 Geoscience events
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A spread consists of two or more related futures positions. Note the word "related....

A spread consists of two or more related futures positions. Note the word "related" here. In order for a spread to be recognized for margin purposes-more on that in a moment-there has to be an economic connection between its constituents. Plainly, gold and silver are fellow-traveling precious metals, but formal recognition of the spread by the exchange clearinghouse is required to derive the spread’s benefits.What benefits? Well, in most cases, reduced margin requirements.


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