The word "
spread" is generally used in the financial industry to refer to the difference between two related entities that can be expressed quantitatively while the word "
crack" is used in the
oil refining industry as a verb describing the process of separating and transforming the various chemical components of
crude oil into saleable refined products. Thus the term "crack spread" refers to the spread, or margin, that a
refinery can earn by cracking a barrel of oil into refined products.
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A type of commodity-product spread involving the purchase of crude oil futures and the sale of gasoline and heating oil futures.
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