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OTC Spread Swap


A cash-settled swap which is based on the price differential between two over-the-counter commodities (for example, crude oil and gasoline. As such, this swap is similar to a basis swap in the sense that the fixing basis for the underlying is the price differential between two commodities. However, a basis swap is usually based on the same type of an underlying commodity as it is traded at two different locations.



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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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