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Crack Spread
(redirected from "crack spread")

    Also found in: Wikipedia 0.03 sec.
Crack Spread
The spread created when purchasing oil futures and offsetting the position by selling gasoline and heating oil futures.

Notes:
As the two futures contracts within the spread are relatively similar, risk is hedged against. The name is derived from the fact that "cracking" oil produces gasoline and heating oil. Thus, oil refiners are able to generate residual income by entering into these transactions.
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