You’ve no doubt heard people rave about the fantastic and safer trading available through option spreads. Every option spread offers a unique combination-way to earn money, but do you know why spreads are a safer way to trade?

I’m revealing something to you NOW, something very few people know or understand — even the people who originate options so that you can create spreads! I’m talking about spreads of any kind: option spreads, spreads on futures, and even forex spreads.


When you enter any kind of spread, you are taking advantage of two of the greatest inefficiencies possible in the trading of markets. Any professional trader will tell you that the most money is made when the underlying vehicle is mispriced — overpriced or underpriced. Spreads take advantage of mispricing! When you enter a spread, you are both long one leg of the spread and short the opposite leg. Doing this creates inefficiency number one: you have become invisible in the market. How can this be? How can your position become invisible to the wolves who created and originated the possibility for creating the spread to begin with? The answer is that when you are both long and short, you are essentially in two markets, and your position is no longer known. The wolves can no longer see you; they cannot tell if you are long or short! But there is a second inefficiency available to spread traders:

WHEN YOU ENTER A SPREAD TRADE YOU MESS UP THE WAY VOLATILITY IS CALCULATED! You are both long and short. In that situation, the model that is used to compute margin can no longer see the volatility in your trade, resulting in the greatest efficiency in the use of your capital, EXTREMELY LOW MARGINS. It’s true: the less money you have to put up to trade, the greater the number of positions you can trade.

What if I told you it is possible to put up only 1/8th the margin to trade a spread as you would have to put up to trade a naked position in the underlying asset? Would that excite you? It excites me. That means that if the exchange or your broker required margin of $800 to enter a single naked long or short position in the underlying asset, and all you had to put up was $100 to trade spreads in the same asset, you could trade eight spread positions using the same $800 as you would have to margin-up to trade a single position in the outright.

Discrepancies and inefficiencies in the market are the way to make the most money, and spreads are the way to take advantage of those discrepancies and inefficiencies while at the same time substantially lowering your risk.

Click here to sign up for our Free weekly newsletter, Chart Scan™


You may have been attracted to this page looking to trade option spreads in the share market, but sadly that is not where you will find the advantages in efficiency that I’ve been writing about. You may think that I’ve been writing about trading option spreads in the futures or forex market, but again, those places are not where you will find the very best spreads. What I am talking about are spreads in the futures markets…


My name is Joe Ross, and I’ve been a trader for over five decades. I’ve written 12 books on trading. I’ve traded just about everything there is to trade: stocks, options on stocks, ETFs, futures, options on futures, forex, options on forex, single stock futures, and Contracts for Difference. And, I still trade them all — I love to trade. Trading is my life. However, the single most efficient, least complicated method I have ever discovered is that of trading spreads in the futures markets. The advantages are incredible, and without equal.

Receive a daily journal of high probability trades from Traders Notebook™!


As I previously mentioned, when you trade spreads in the futures markets, you have the most efficient use of your money compared with any other market or way of trading. I have personally seen margin requirements as low as 5% of the margin required to trade anything else. Can you imagine what it’s like to trade having to collateralize a trade with only $69, when an outright trade in the same underlying required margin of $1,200? Isn't that an incredible possibility for return on investment?

Did you know that futures spreads trend more than any other market? They tend to trend longer, more often, and more steeply than trends in stocks, forex, or even outright futures. "The trend is your friend." The most money is made when prices are trending. The wonderful thing about trending in futures spreads is that the trends are based on reality. Spreads don’t trend because of market manipulation, they trend because something real is happening in the underlying asset.

Spreads are an excellent way to trade seasonal tendencies. Futures spreads often trend seasonally, meaning once, twice, or more each year. You can know when to expect the spread to begin making you money. In fact, there is more information easily and readily available for futures spread trading than for any other form of trading I’ve seen. When traded seasonally, the percent of wins against losses is high.

Spreads, much like options, can be used to create partial positions in the underlying. In fact, virtually every advantage that can be had with options can be accomplished via spread trading.

Spreads allow you to take less risk than is available with outright share or futures positions. The amount of risk between two Intramarket futures positions is usually less than the risk in an outright stock or futures position. Spreads make it possible to hedge any position you might have in the market.

Futures spread trades are less volatile than other forms of trading. They are considerably less volatile than share trading, option trading, or straight futures trading. In fact, is because of such low volatility that margins for spreads are so low.

Spreads avoid problems associated with lack of liquidity. You can trade in less liquid markets. Since you can trade where there is less liquidity, you have more trading opportunities than when not trading spreads.

There is less concern with slippage. Spreads require less precise entries. Getting an exact fill becomes less important. Sadly, the whole truth of spread trading has been kept secret from the public.

Spreads enable you to take advantage of inverted markets. When a market is inverted, you have two possibilities for taking profits: once when prices invert, and again when prices return to a normal progression.

Spreads in certain situations offer greater odds of winning, but never greater probabilities of losing.


Perhaps the greatest advantage of all, SPREADS ALLOW YOU TO AVOID STOP RUNNING! You will not be the victim of stop fishing when using spreads. You will have become invisible to the market makers and market movers. They cannot possibly run your stops, because there aren’t any stops when you trade spreads. Spreads have exit points, but it is physically impossible to place a stop order in a spread trade. Spreads create a level playing field. Because there are no stops possible, spread trading is a more pure form of trading.

Click here to learn What is Spread Trading?

Click here to get started Learning to Trade Spreads!



Receive a series of lessons including two FREE eBooks that brought Joe Ross his success in trading all markets: the Law of Charts™ (TLOC) & Traders Trick Entry (TTE). Also, learn the finer details of trading from our three Master Traders in our free weekly Chart Scan Newsletter, and more! We will not sell, rent, or trade your information.



Join Us



TLOC Image

About Us Contact Us Success Stories Trading Educators Store FAQ Trading Blog Resources Franchises Broker Referral


Derivative transactions, including futures, are complex and carry a high degree of risk.
there are intended for sophisticated investors and are not suitable for everyone. For more information, see the
Risk Disclosure Statement for Futures and Options


© 2018 Trading Educators, Inc. All Rights Reserved