25 August 2016

Spread

​​​​​The Spread study is used with ​​comparable instruments that are trading with a spread between them such as:two equities in same industry...

​​​​​The Spread study is used with ​​comparable instruments that are trading with a spread between them such as:

  • two equities in same industry sector,
  • the A and B share for the same company,
  • two commodities futures

The spread can widen and narrow and can be used for Spread Trading,  for example​ where the trader sells one instrument and buys the other when the spread is wider than historically norms.