The price spread that results when opposing transactions are entered into in T-bill futures (T) and Eurodollar futures (ED). For instance, a TED spread may be established by being long a Treasury bill futures and short a Eurodollar futures. A long TED spread (buying a T-bill futures and at the same time selling a Eurodollar futures) will be based on the expectation that the price spread between the two futures will widen. In contrast, a short TED spread (buying a Eurodollar futures and simultaneously selling a T-bill futures) will indicate an anticipation of a narrowing price spread.
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