Why prices on two intra-market futures contracts tend move

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Q. corn user is interested in buying low in cash market and selling high (can ceiling futures position taken) in futures market. So -$0.25/ but B) An intra-market futures spread for commodity X is where a long position is taken in a contract for commodity X, month A and a short position is taken in a contract for commodity X, month B, where B and A are not same.

I) Margin requirements on such a spread are often less than y would be if two contracts were considered separately. Why? Prices on two intra-market futures contracts tend to move together because similar fundamentals drive prices in both contract markets.

II) For agricultural crops, margin requirements on an intra-market futures spread are often less when months in question are in same crop year than when y are in different crop years. Why?

Reference no: EM1369303

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