Question

A TRADER PURCHASES A MAY 2021 PLATINUM FUTURES CONTRACT AND SELLS AN OCTOBER 2021 PLATINUM FUTURE CONTRACTS. WHAT IS THE TRADER EXPECTING TO HAPPEN TO THE SPREAD?

A. THE TRADER IS EXPECTING THE SPREAD TO NARROW; MAY CONTRACTO TO DECREASE, AND OCTOBER CONTRACT TO INCREASE.
B. THE TRADER IS EXPECTING THE SPREAD WIDEN; MAY CONTRACT TO INCREASE, AND OCTOBER CONTRACT TO DECREASE.
C. THE TRADER IS EXPECTING THE SPREAD TO NARROW; MAY CONTRACT TO INCREASE, AND OCTOBER CONTRACT TO DECREASE.
D. THE TRADER IS EXPECTING THE SPREAD TO WIDEN; MAY CONTRACT TO DECREASE, AND OCTOBER CONTRACT TO INCREASE.

Answer 1

Answer: THE TRADER IS EXPECTING THE SPREAD TO NARROW; MAY CONTRACTO TO DECREASE, AND OCTOBER CONTRACT TO INCREASE.

Explanation: THE TRADER IS EXPECTING THE SPREAD TO NARROW; MAY CONTRACTO TO DECREASE, AND OCTOBER CONTRACT TO INCREASE.