Spreading (simultaneously buying one futures contract and selling another) is a popular trading strategy. Here are the basics.
There are three types of spread trades, but generally, traders are more concerned with the movement of the legs of the spread than the actual prices, and traders make or lose money based on whether the prices of the legs converge or diverge, depending on the spread strategy.
Intra-market (calendar) spreads involve buying and selling different contract month expirations of the same product.
Intermarket spreads involve buying or selling different, but related futures contracts in the same contract month, like gold and silver.
Commodity product spreads involve buying and selling contracts used in actual raw material processing, like the soybean crush (buying soybean futures and selling soybean meal or oil futures).
Because traders are simultaneously buying and selling a contract, the initial margin requirements are generally the difference between the initial margin requirements of each product and are therefore usually quite low.
For example, if you are trading a May-July calendar spread, where the initial margin for the May contract is $1000 and the initial margin for the July contract is $900, the initial margin requirement for the spread is $100.