Spread Signal
Posted: Fri Oct 29, 2010 12:43 pmSpreads show the difference in price between two securities.
A spread Trading involves buying one security and selling another (currency pair).
Profit opportunities arise from the narrowing or expanding of the difference between the two securities.
Spreads are typically constitute between securities with high correlation.
Exploit temporarily disrupted relationships between securities.
Opening at the same time Long & Short position we expect that one of securities will rise faster (or fall more slowly) than the price of other.
You can also spread a single security, by buying one contract and selling another with different maturity.
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This gives a warning signal when the Spread reaches a set value