Introduction to Spreading

This is the foundation knowledge for anyone wanting to move to advanced trading styles.
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Spreading is a huge topic and a trading approach that most if not all professional futures traders use. Yet there is not much written on spread trading. There are a few academic papers here and there and there are a couple of old books you might find on amazon, but not much else.

Perhaps that is because it does not come across as simple or sexy as swing trading, candle sticks or that “one simple rule that will make you $9,675 per day”. Don’t get me started on that stuff!

As far as spreading goes, the degree to which it is used in the professional or proprietary trading space is evidence enough that every trader should know this.

These short lessons cover the basics. The basics are bull, bear and intermarket spreads. That are so called ‘two-legged’ spreads.

In other courses on this site, there is more detailed information on variations of these three spreads, approaches to spread analysis, mechanics of spread trading and of course more complex spread types.

We’ll try to keep each lesson here to the equivalent length of 1-2 pages. Like a lot of trading topics, spreading is an area where one could rattle on for a long time, but we will all be best served by getting straight to the point.