Spread

The Spread compares two sets of bars and calculates the difference between their prices. Usually spreads are calculated with two related commodities, such as silver and gold. As a trading strategy, a spread involves buying one commodity and selling another. The spread between an unrefined commodity and a refined commodity (such as oil and gasoline, or live hogs and pork bellies) is called a crack spread. It gives an indication of the cost of production.

See also Comparative Relative Strength Index, Comparative Strength and Comparative Performance.

Formula:




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