How to Get Started with Spread Trading: The Complete Guide

Trading spreads is one of the most effective strategies in financial markets, allowing traders to profit from price differences between related financial instruments. This type of trading involves simultaneously buying and selling two assets with different conditions, creating a balanced position for risk hedging and optimizing potential returns. In this guide, we will cover how to properly start trading spreads and manage your operations.

Understanding the Basics of Spread Trading

A spread in finance is defined as the difference between the prices of two related or alternative assets. Before starting spread trading, it is important to understand the different types of combinations you can use.

Traditionally, spread traders work with three main types of instruments:

1. Spot assets — buying and selling physical assets on the current market
2. Perpetual contracts — derivative securities without an expiration date, where participants receive a funding rate
3. Futures contracts — derivative securities with a fixed expiration date

By combining these instruments with different conditions, traders create unique structures that allow profit from specific market movements.

Placing and Managing Spread Orders

Preparing to Place an Order

The first step is choosing a trading platform that supports spread operations. On such a platform, you will find a dedicated section for spread trading with an organized grid of available combinations. Each tile in the grid represents a unique pair of instruments or spread structure.

Review the available options, hover over the combinations of interest to get detailed information. The platform typically highlights the most favorable price options with a special frame.

Setting Spread Order Parameters

After selecting the desired spread combination, go to the order placement page. You will need to configure the following parameters:

Order Side — determine whether you want to buy the spread (go long) or sell it (go short). The long part of the operation always aligns with the overall direction of your position.

Order Type — choose a limit order (at a price you specify) or a market order (executed at the current market price).

Spread Quotation — enter the desired spread, representing the difference between the quotes of the two parts. This value can be positive (buy spread), negative (sell spread), or zero.

Position Size — set the volume you want to trade. A value of 1 indicates the minimum unit of the structure; execution is always symmetrical for both parts of the spread.

Maximum Operation Amount — the system automatically calculates the maximum you can trade based on your available capital and margin.

Leverage Level — if permitted, set leverage to increase your position. Spot trading typically supports up to 10x leverage, while futures trading may allow up to 100x.

Confirming and Executing the Order

On the right side of the screen, you will see two informational panels:

• Spread Order Book — shows all active orders on the market for this specific spread combination. Operations are executed at spread prices, not at individual underlying asset prices.

• Preview of Calculations — provides a visualization of potential profit or loss depending on different price movement scenarios.

Review all details and click the buy or sell button. A confirmation popup will appear, allowing you to review the operation conditions again. Then click “Confirm” to execute or “Cancel” to abort.

Important notes:

If your combination includes a Perpetual contract, the order placement page will display the current funding rate, helping you make more informed decisions.

If you are using Spot trading with spreads, leverage can only be set if margin trading is enabled. Make sure this feature is activated in your settings.

Monitoring and Controlling Spread Operations

Viewing Active Spread Positions

Active spread orders can be viewed in the “Open Positions” section of your trading platform. Find the tab dedicated to spread operations, where all your current orders will be displayed.

In this list, you will find key details:

• Spread combination (structure name)
• Underlying assets
• Order placement price
• Current execution status (partially filled/active)
• Options to edit parameters or cancel

To modify the price or volume of an order, click the edit icon. To stop the operation, simply click “Cancel” in the respective section.

Analyzing the History of Executed Operations

To review completed orders, go to the “Order History” section and select the filter for spread operations. Each completed order can be expanded to view detailed information about each part of the spread structure.

Filtering spread operations:

The platform offers several filtering options:

• By markets — check this option to view all your spread operations regardless of specific assets, or leave it unchecked to see only operations with the current asset.

• By instrument types — use the dropdown menu to filter:

  • Spot only (shows operations involving spot trades)
  • Perpetual only (shows operations with perpetual contracts that include a funding rate)
  • Futures only (shows operations with futures contracts with a fixed expiry date)
  • All instrument types (displays the full history of all spread operations)

Alternative way to view orders

Typically, the main menu of the platform has an “Orders” section, where you can switch between “Active Orders” and “History.” This allows quick access to current positions or past spread operations.

To cancel an active order, click “Cancel” in the actions section.

Conclusion

Spread trading on financial markets is a powerful tool for experienced and beginner traders alike. Understanding how to place spread orders, manage positions, and analyze their results will help you create more balanced and risk-controlled portfolios. Remember, each spread operation requires careful planning and continuous monitoring to achieve optimal results.