Expecting that the spread will narrow to 50 in a months


Suppose that the platinum futures price is $1,580 per ounce and the gold futures price for a contract expiring in the same month as platinum is $1,500 per ounce.

a) Expecting that the spread will narrow to $50 in a month’s time, set up a spread trading strategy.

b) What are three possible ways that the spread can narrow to $50?

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Financial Management: Expecting that the spread will narrow to 50 in a months
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