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Question about a Futures Calendar Spread

by Anshul Singla
(Chandigarh, India)




Question: A member is short 400 March futures contracts and long 200 April futures
contracts. A calendar spread in this case will be __________.

1. Long 200 futures contracts

2. Short 200 futures contracts

3. Long 400 futures contracts

4. Short 400 futures contracts

What is the answer to this question? Please explain.




Comments for
Question about a Futures Calendar Spread

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May 05, 2010
 Stocks Simplified Writes
by: Shaun

2. Short 200 Futures Contracts

It is really as simple as 200 – 400 = -200 or short 200. If you buy 200 of something and then sell 400 of it you have less then what you have bought, regardless of what the expiration date is.
May 06, 2010
 Confusion
by: Anshul Singla

Hi Shaun!

I saw this question in a book where the answer was Long 200 contracts. I was not able to justify it. The book doesn't have any explanation regarding the answer but the book I consulted is a NSE Certification book.

I am still confused about the right answer.
May 06, 2010
 Stocks Simplified Writes
by: Shaun

Hi Anshul Singla

That's a strange one and I'm not sure why that's the answer. If you hold everything throughout it all you'll end up owing more then you get.

If you have a teacher or something ask them. It will be interesting to figure that one out.

Of course it could just be a typo, who knows.
May 12, 2010
 Why Long 200
by: Feroz

Calendar Spread is used for rolling over the position from near month to far month simultaneously. For example, if you are buying a calendar spread that meand you are selling Feb Future and buying March one. Thats why the correct answer is Long 200.
Sep 26, 2010
 CHARTS
by: gaurav

please can anyone tell me, where can i get live charts of calendar spreads on nse futures stocks.

regards

gaurav

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