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+Chapter 35: Futures Option Strategies for Futures Spreads 709 
+the profit or loss that would be made by an intramarket soybean spreader who bought 
+May and sold March at the initial prices of 598 and 594, respectively. The calendar 
+spread generally outperforms the intramarket spread for the prices shown in this 
+example. This is where the true theoretical advantage of the calendar spread comes 
+in. So, if one is thinking of establishing an intrarnarket spread, he should check out 
+the calendar spread in the futures options first. If the options have a theoretical pric­
+ing advantage, the calendar spread may clearly outperform the standard intramarket 
+spread. 
+Study Table 35-4 for a moment. Note that the intramarket spread is only better 
+when prices drop but the spread widens (lower left comer of table). In all other 
+cases, the calendar spread strategy is better. One could not always expect this to be 
+true, of course; the results in the example are partly due to the fact that the March 
+options that were sold were relatively expensive when compared with the May 
+options that were bought. 
+In summary, the futures option calendar spread is more complicated when 
+compared to the simpler stock or index option calendar spread. As a result, calendar 
+spreading with futures options is a less popular strategy than its stock option coun­
+terpart. However, this does not mean that the strategist should overlook this strate­
+gy. As the strategist knows, he can often find the best opportunities in seemingly 
+complex situations, because there may be pricing inefficiencies present. This strate­
+gy's main application may be for the intramarket spreader who also understands the 
+usage of options. 
+LONG COMBINATIONS 
+Another attractive use of options is as a substitute for two instruments that are being 
+traded one against the other. Since intermarket and intramarket futures spreads 
+involve two instruments being traded against each other, futures options may be able 
+to work well in these types of spreads. You may recall that a similar idea was pre­
+sented with respect to pairs trading, as well as certain risk arbitrage strategies and 
+index futures spreading. 
+In any type of futures spread, one might be able to substitute options for the 
+actual futures. He might buy calls for the long side of the spread instead of actually 
+buying futures. Likewise, he could sell calls or buy puts instead of selling futures for 
+the other side of the spread. In using options, however, he wants to avoid two prob­
+lems. First, he does not want to increase his risk. Second, he does not want to pay a 
+lot of time value premium that could waste away, costing him the profits from his 
+spread.