Rollover & basis
What is the Calendar Spread Trade in futures and how do traders bet on the narrowing or widening of two contract months?
By Easy Money Scanner · Educational reference · Not investment advice
The short answer
A calendar spread trade simultaneously buys one futures expiration month and sells another, profiting from the narrowing or widening of the price difference between the two months.
How it works
Traders use calendar spreads to express views on contango, backwardation, or seasonal supply/demand shifts while reducing outright directional price exposure compared to a single-leg position.
An example
Long March corn, short July corn spread.
Risk & limitations
Spreads still carry margin and basis risk, not risk-free.
Examples are hypothetical, not trade recommendations. US contract and regulatory references do not automatically apply in Canada. Rules, margin requirements and broker policies can change; confirm them with the relevant authority and your broker.