This is a term used in connection with "arbitrage " dealings, which subject it is first necessary to understand. In dealings of this kind between New York and London, for instance, there is a difference in quotations between the two markets to make one equivalent to the other, as the cost of shipment, rate of exchange, loss of interest, etc., has to be taken into consideration. For the sake of illustration, we will call a stock selling in London at 102.50 the equivalent price to a stock selling in New York at par. Ordinary" arbitrage" dealings are based, therefore, upon the London price being in excess of 102.50, so that there may be a profit made by purchasing in one market and selling in the other. Should, however, this difference in price be less than the normal; that is, should the London quotation be less than 102.50 when the New York quotation is at' 100, the profit would be made by buying in London and selling in New York. Transactions of that kind are known as " back spreads."