crack spread investment & finance definition
The difference in price between the purchase of crude oil futures and the sale of heating oil and gasoline futures, or vice versa.
Crack spread is a term used in the oil industry and futures trading for the differential between the price of crude oil and petroleum products extracted from it - that is, ...
Definition
Crack spread
In energy futures, the simultaneous purchase of crude oil futures and the sale of petroleum product futures to establish a refining margin. See Gross Processing Margin.
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Crack spreads are investing strategies that involve the spread on specific types of commodities. The crack spread is focused on the spread that exists between a core product and the end products that are developed and marketed using the core product.
Crack Spreads
A petroleum refiner, like most manufacturers, is caught between two markets: the raw materials he has to purchase and the finished products he offers for sale.
Crack Spread: The spread between crude oil and it's products: heating oil and unleaded gasoline plays a major role in the trading process.
Crack Spreads: The spread between crude oil and its products.
Credit Spread: The difference in value of two options, where the value of the one sold exceeds the value of the one bought.
crack spread A commodity-product spread involving the purchase of crude oil futures and the sale of gasoline and heating oil futures.
 See also: Futures, Future, Spread, Crack, Market
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