A spreader: is a type of hedger. takes relatively high-risk positions. is also known as a...
- A spreader:
- is a type of hedger.
- takes relatively high-risk positions.
- is also known as a scalper.
- All of the above.
- None of the above.
Homework Answers
Solution : e. None of the above.
Explaination :
The Spreader is the person who intends to take benefit of the price variations among the future contracts. The spreader trades at low level risk and thats the reason it is attractive for many investors as it requires low margin too. In comparison to hedger, the spreader is unlike to give more priority on high risk positions. So it can be termed that spreader does not take relatively hike risk. In comparison to scalper, spreader is unlike to take immediate square off positions the way scalper takes.
So it can be concluded that a spreader is not a hedger, nor takes relatively high risk nor is the scalper.
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