C. Spreading (continued)
Ex: Buy 1 Corn contract at 258
- Sell (short) 1 Corn contract at 270
- Close out by:
- 1. Selling the long contract at 264.
- 2. Buy a short contract at 273.
- Profit:
- Long: 264-258 = 6¢
- Short: 270-273 = - 3¢
- 3¢
- 3¢ * 5000 bu = $150 Net