Add training workflow, datasets, and runbook

training_data/curated/text/17c18043ca4ac9161425fc966213ac42f3a49897e77021cf34ef903f8d23c82a.txt

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+tHe COnCepts And MeCHAniCs OF spreAd trAding 
+spread is equal to 200 points, a long October/short december spread initiated at October 100 points 
+under might be termed a limited-risk spread. However, the same long October/short december 
+cotton spread would not be termed limited risk if, for example, October were at a 300-point pre-
+mium. nevertheless, it should be noted that even in this latter case, the maximum risk would still be 
+defined—namely, 500 points—and in this respect the spread would still differ from spreads involving 
+the selling of the nearby contract, or spreads in markets that do not fulfill the limited-risk specifica-
+tions detailed above.
+the best way to understand why it is unlikely for the premium of a distant month to exceed car-
+rying costs is to assume the existence of a situation where this is indeed the case. in such an instance, 
+a trader who bought a nearby month and sold a more distant month would have an opportunity for 
+speculative gain and, at worst, would have the option of taking delivery, storing, and redelivering at 
+a likely profit (since we assumed a situation in which the premium of the distant month exceeded 
+carrying charges). 
+sounds too good to be true? Of course, and for this reason differences beyond full 
+carry are quite rare unless there are technical problems in the delivery process. in fact, it is usually 
+unlikely for a spread difference to even approach full carry since, as it does, the opportunity exists for 
+a speculative trade that has very limited risk but, theoretically, no limit on upside potential. 
+in other 
+words, as spreads approach full carry, some traders will initiate long nearby/short forward spreads 
+with the idea that there is always the possibility of gain, but, at worst, the loss will be minimal. For 
+this reason, spreads will usually never reach full carry.
+At a surface glance, limited-risk spreads seem to be highly attractive trades, and indeed they often 
+are. However, it should be emphasized that just because a spread is relatively near full carry does not neces-
+sarily mean it is an attractive trade. V ery often, such spreads will move still closer to full carry, resulting 
+in a loss, or trade sluggishly in a narrow range, tying up capital that could be used elsewhere. How-
+ever, if the trader has reason to believe the nearby month should gain on the distant, the fact that the 
+spread has a limited risk (the difference between full carry and the current spread differential) makes 
+the trade particularly attractive.
+the components of carrying costs include interest, storage, insurance, and commission. W e will 
+not digress into the area of calculating carrying charges. ( such information can be obtained either 
+through the exchanges themselves or through commodity brokers or analysts specializing in the given 
+commodity.) However, we would emphasize that the various components of carrying charges are 
+variable rather than fixed, and consequently carrying charges can fluctuate quite widely over time. 
+interest 
+costs are usually the main component of carrying charges and are dependent on interest rates and 
+price levels, both of which are sometimes highly volatile. 
+it is critical to keep changes in carrying costs 
+in mind when making historical comparisons.
+Can a trader ever lose more money in a limited-risk spread than the amount implied by the differ-
+ence between full carry and the spread differential at which the trade was initiated? the answer is that 
+although such an occurrence is unlikely, it is possible. For one thing, as we indicated above, carrying 
+charges are variable, and it is possible for the theoretical maximum loss of a spread trade to increase 
+as a result of fluctuations in carrying costs. For example, a trader might enter a long October/short 
+december cotton spread at 100 points October under, at a time when full carry approximates 200 
+points—implying a maximum risk of 100 points. However, in ensuing months, it is possible higher