Betting on changes in the commodity-product spread is a popular trade in the futures market. The trade can be very useful for firms which convert raw materials to products. These firms could buy commodity futures and sell product futures, hedging risk and helping to lock in profit margins.
Investment dictionary. Academic. 2012.
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commodity-product spread — The simultaneous purchase (or sale) of a commodity and the sale (or purchase) of the products derived from that commodity; for example, buying soybeans and selling soybean oil and meal. This is known as a crush spread. Another example is the… … Financial and business terms
commodity-product spread — Fin coordinated trades in both a commodity and a product made from it … The ultimate business dictionary
spread — n 1 a: the difference between any two prices for similar articles the spread between the list price and the market price of an article b: the difference between the highest and lowest prices of a product or security for a given period c: the… … Law dictionary
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commodity trade — ▪ economics Introduction the international trade in primary goods. Such goods are raw or partly refined materials whose value mainly reflects the costs of finding, gathering, or harvesting them; they are traded for processing or… … Universalium
spread trade — A special type of pit or CME Globex platform trade that allows traders to trade the differential between either:1. The price of a futures or options commodity in different contract months; OR2. The price of two futures or options commodities in… … Financial and business terms
crush spread — The purchase of soybean futures and the simultaneous sale of soybean oil and meal futures. Chicago Board of Trade glossary A type of commodity product spread which involves the purchase of soybean futures and the sale of soybean oil and soybean… … Financial and business terms
crack spread — A type of commodity product spread involving the purchase of crude oil futures and the sale of gasoline and heating oil futures. The CENTER ONLINE Futures Glossary A hedge used in the energy futures market to offset the risk of buying (or… … Financial and business terms
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