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interdelivery spread

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Financial Dictionary

Interdelivery Spread

Simultaneously entering a long and short on the same futures contract but with different delivery months in the hopes that the price difference between the two months widens or narrows, depending on the underlying investment.

Investopedia Commentary

Spread traders are only concerned that their long positions rise in value relative to their short positions. For example, if a trader is long June corn and short August corn, then the trader is hoping that the price of June corn rises and the price of August corn falls.

Related Links

Futures Fundamentals
Out-of-the-Money Put Time Spreads

See also: Calendar Spread, Delivery Month, Futures, Intercommodity Spread, Long, Short

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Financial Dictionary

interdelivery spread

In options or futures, the purchasing of contracts expiring in one month and the selling of contracts expiring in a different month but on the same stock or commodity. For example, an investor might buy a June coffee contract and sell a September coffee contract.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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