Online Trading Blog

Seasonal futures spread trading or seasonal trading is a futures trading strategy used to profit from seasonal variations in futures price changes. In this trading strategy, the traders are only concerned with the price changes between two futures contracts, the spread; one contract that he buys and the other he sells. Seasonal futures spread trading utilizes periodical trends in contract prices to execute trades.

An seasonal spread trader can profit in 4 different situations. If he thinks that the difference in prices will increase. He can profit

• If the buying contract price goes up than the sold contract.
• If the sold contract price goes down than the one brought.

If he thinks that the difference in prices will decrease. He can profit

• If the buying contract goes less up than he sold.
• If the sold contract goes less down than one brought.

Seasonal futures spread trading can be done for a variety of types of futures like for grains, metals and financial instruments. The two futures contracts can be same with different delivery months or different with different underlying commodities. Seasonal spread trading also includes risks and the trader must combine fundamental, technical and historical analysis to find suitable futures contracts. The spread charts showing the price difference of two selected contracts for a period of time are also available with some trading systems, which can guide you in seasonal spread trading.

This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.