What is a spread contract? Can I create a spread contract in the basket order?

A spread contract is a trading strategy where two related contracts are bought and sold simultaneously to benefit from the price difference between them. This is commonly used in futures trading, such as:

• Calendar Spreads: Buying a near-month contract and selling a far-month contract of the same asset.
• Inter-commodity Spreads: Trading two related commodities, like crude oil and heating oil futures.

Yes, you can create a spread position using a basket order, where you place both legs of the spread in a single order. However, ensure that:

• Both contracts are added to the basket order simultaneously.
• The margin benefit for the spread position is applicable as per exchange rules.

Using a basket order helps execute both trades together, reducing the risk of partial execution.