Inter-Commodity Spread
A spread trade that is long one futures product and short a related but different product — e.g., long ES / short NQ.
An inter-commodity spread is a position combining long exposure in one futures product and short exposure in a related product. The goal is to isolate the relative performance between the two, rather than taking an outright directional bet.
Common examples: long ES / short NQ (expressing a view that large-cap non-tech will outperform tech); long CL / short natural gas (crude vs. natgas energy spread); long GC / short silver (gold-silver ratio trade).
Under SPAN, inter-commodity spreads with recognized correlation receive margin credits, reducing total capital requirement compared to two naked positions.
Related Terms
Calendar Spread
A spread trade that is simultaneously long one contract month and short another month of the same futures product.
IntermediateES (E-mini S&P 500)
The world's most liquid equity index futures contract — tracks the S&P 500, $50 per point, expires quarterly.
BeginnerNQ (E-mini Nasdaq-100)
CME E-mini futures on the Nasdaq-100 index. $20 per point, 0.25-tick. Tracks the top 100 non-financial Nasdaq companies.
BeginnerSPAN Margin
Standard Portfolio Analysis of Risk — the CME's risk-based margin system that calculates required margin across a portfolio of futures and options.
Advanced