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.
Derivatives
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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