What is a 'Spread' ?

What is a 'Spread'

A spread is the difference between the bid and the ask price of a security or asset.

A)  FKLI SPREAD (click on pic to have enlarged view)

B) FCPO SPREAD  (click on pic to have enlarged view)

More reading:  https://www.youtube.com/watch?v=4x0qBSQUPSk

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Learning futures: What is Bull Spread and Bear Spread ?

What is Bull Spread and Bear Spread



(A) Bull Spread 

 A "bull spread" is a strategy designed to profit if the price of the underlying commodity goes up. This involves buying the nearby futures contract and selling the more distant-futures contract. The example we've been working with throughout the chapter, long September wheat for $4.70/bushel and short December wheat for $4.85/bushel, is a bull spread. The trader wants the price spread between the long and short positions to narrow in a normal (contango) market and to widen in an inverted (backwardation) market.



(B) Bear Spread

A "bear spread" is a strategy designed to profit if the price of the underlying commodity goes down. It is mechanically similar to a bull spread, except the investor goes short on the nearby futures position and long on the more distant futures position. If the trader in the example would have sold the September contract and bought the December contract, then he would be taking a position that the December price would go down. In a normal market, the trader wants prices to widen and in an inverted market to narrow.

More reading: 
http://www.investopedia.com/exam-guide/series-3/studyguide/chapter7/bull-bear-spreads.asp

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