Merits, demerits of spreading futures and how to play safe

Some of the NSE contracts are notoriously illiquid.

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In my previous article, I highlighted the buy or sell spread trades, which could be described as intra-market or calendar spreads, as they involve buying a futures contract in one month while simultaneously selling the same contract in a different month.

To recap, the goal of this strategy is to take advantage of the relationship between the two contracts. In most cases, there will be a loss in one leg of the spread, but a profit in another leg.

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Note: The results are not exact but very close to the actual.