Crack

DEFINITION of 'Crack'

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

BREAKING DOWN '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.

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RELATED FAQS
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    Learn about values of futures contracts and the initial margin a trader must place in an account to open a futures position, ... Read Answer >>
  2. What economic indicators are especially important to oil traders?

    Economic indicators are used by traders and investors in an attempt to understand the underlying fundamentals of the market. ... Read Answer >>
  3. What does it mean when I get a maintenance margin call?

    Understand how maintenance margin calls work, and learn about how margin requirements are different for trading stock versus ... Read Answer >>
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  5. What types of items can you buy futures for?

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