Some investors combine two or more different futures contracts into one investment position that offers the potential for generating a modest amount of profit while restricting exposure to loss. This practice is called
A) speculating.
B) spreading.
C) gambling.
D) market making.

Question

Quizplus · Accepted Answer

Spreading involves combining two or more different futures contracts to create a position that can potentially generate profits while limiting risk. This strategy is used to take advantage of price differences between related futures contracts rather than outright speculation on the direction of market prices.

Some Investors Combine Two or More Different Futures Contracts into One