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, the profit margin that an oil refinery can expect to make by `cracking` crude oil (breaking its long-chain hydrocarbons into useful shorter-chain petroleum products). In the f.....
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http://en.wikipedia.org/wiki/Crack_spread
A hedge used in the energy futures market to offset the risk of buying (or selling) crude oil with an opposite transaction in the refined products that may be derived from it.
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http://www.exchange-handbook.co.uk/index.cfm?section=glossary&first_letter=
A type of commodity-product spread involving the purchase of crude oil futures and the sale of... <a target=_blank href='http://www.finance-glossary.com/terms/crack-spread.htm?id=2059&ginPtrCode=00000&PopupMode=false' title='Read full definition of crack spread'>more</a>
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Is the purchase of crude oil against the sale of the refined products. In futures trading, it is the simultaneous purchase of crude oil futures versus the sale of heating oil and gasoline futures. The spread differentials reflect the potential refining margins or profitability. The spread computes the cost of the raw commodity input, crude oil, and...
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http://www.oasismanagement.com/glossary/
A crack spread is an options strategy employed in the oil and energy sector named after the ability of oil producers to generate?residual income?by cracking oil products in gasoline and heating oil.
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