A commodity swap that calls for the payment of the spread between crude oil and a specific basket of “cracked” or refined products. It is a variation on the concept of the basis swap. Primarily, crack swaps are used in energy markets, especially by refiners to hedge oil price exposures. In other words, they guarantee the refiner a spread between the price of crude oil and that of refined products such as heating oil, gasoline, jet fuel, etc. More specifically, refiners use crack swaps to preserve profit margins in the event that crude prices change with respect to refined product prices (that is when crude prices are rising faster or falling slower than that of refined products).

The crack swap is also known as a refinery margin swap or as a crack spread swap.