Crack

AAA

DEFINITION of 'Crack'

A trading strategy used in energy futures to establish a refining margin.

INVESTOPEDIA EXPLAINS 'Crack'

By simultaneously purchasing crude oil futures and selling petroleum product futures, a trader is attempting to establish an artificial position in the refinement of oil, created through a spread.

RELATED TERMS
  1. Cracking

    Used in the oil and gas industry to refer to a variety of methods ...
  2. Crush Spread

    A trading strategy used in the soybean futures market. A soybean ...
  3. Sweet Crude

    A type of oil that meets certain content requirements, including ...
  4. Sour Crude

    The name given to barrels of crude oil that do not meet certain ...
  5. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or ...
Related Articles
  1. Naked Call Writing: A Risky Options ...
    Options & Futures

    Naked Call Writing: A Risky Options ...

  2. An Introduction To Depositary Receipts
    Bonds & Fixed Income

    An Introduction To Depositary Receipts

  3. Vertical Bull and Bear Credit Spreads
    Options & Futures

    Vertical Bull and Bear Credit Spreads

  4. Forecasting Market Direction With Put/Call ...
    Options & Futures

    Forecasting Market Direction With Put/Call ...

comments powered by Disqus
Hot Definitions
  1. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  2. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  3. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  4. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  5. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
  6. Limit-On-Open Order - LOO

    A type of limit order to buy or sell shares at the market open if the market price meets the limit condition. This type of ...
Trading Center