A futures spread involves simultaneously buying and selling related futures contracts to profit from changes in their price relationship rather than absolute price direction. Common spread types include calendar spreads (same commodity, different delivery months), inter-commodity spreads (related commodities), and location spreads (same commodity, different delivery points). Spreads often exhibit different risk-return characteristics than outright positions.

Futures spreads can provide lower margin requirements and reduced volatility compared to outright futures positions while offering exposure to relative value changes. Spread trading requires understanding the fundamental relationships between contracts and factors that influence price differentials. Professional traders often prefer spreads for their risk management benefits and profit potential from relationship changes.

Real-world example: A trader buys July corn futures and sells December corn futures, profiting from the spread widening from $0.20 to $0.35 per bushel as summer weather concerns increase near-term corn prices relative to post-harvest expectations.