Spread trading, which involves simultaneously buying one futures contract and selling another, is popular amongst traders and hedgers of all kinds. By exploiting the relationship between the legs of the spread rather than the market direction, spread trading provides a less risky approach compared to trading futures outright. In this update, we’re pleased to announce the release of support for various CME Group Futures spread contracts!
Types of Spreads
We now offer support for two types of CME Group spread contracts: calendar spreads and commodity spreads. Calendar spreads involve trading contracts with different expiration dates within the same commodity while commodity spreads allow traders to trade contracts for different commodities, providing even greater flexibility in portfolio management.
Calendar Spreads
In the example below, we see a chart of CLM24U24. This CME Group spread contract is mathematically equivalent to CLM24 – CLU24. It represents a two-legged contract involving Crude Oil futures contracts expiring in different months, June ’24 and September ’24.
Commodity Product Spreads
An example of a commodity spread contract could be RBJ25HOJ25. This CME Group spread contract is mathematically equivalent to RBJ25 – HOJ25 and represents a spread between Gasoline (RB) and Heating Oil (HO) futures contracts.
Available Contracts
At this time, spread contracts can be created using the following CME Group futures products:
- CL: WTI Crude Oil Futures
- MCL: Micro WTI Crude Oil Futures
- HO: Heating Oil Futures
- NG: Henry Hub Natural Gas Futures
- RB: RBOB Gasoline Futures
Market Update Into September 7th: Inflation Data Incoming