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Commodity Product Spread

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Commodity Product Spread
A spread involving different but related commodities. In it, one buys (or sells) futures in a raw commodity at the same time one sells (or buys) futures in a product of that commodity. For example, one may buy futures for crude oil while selling futures in refined oil. Commodity product spreads are useful because they can take advantage of price spread between the underlying commodities and the products that can be derived from soybeans. See also: Crush, Crack.

commodity product spread
A spread involving two commodities: a primary commodity and a byproduct of the primary commodity. For example, an investor might purchase a contract for soybeans and sell short a contract for soybean oil.


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