Trading the gold/silver spread

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.