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Crack Spread


A commodity trading strategy which involves the purchase of crude oil futures and the simultaneous sale of gasoline and heating oil futures. In a crack spread, a trader, like a refinery, takes a long position in crude oil futures and a short position in refined oil futures. This has the effect of creating an synthetic position on the price of refining oil.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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