Crush Spread

Crush Spread
A trading strategy used in the soybean futures market. A soybean crush spread is often used by traders to manage risk by combining soybean, soybean oil and soybean meal futures positions, into a single position. The spread position is used to hedge the margin between soybean futures, and soybean oil and meal futures.

By simultaneously purchasing soybean futures and selling soybean meal futures, a trader is attempting to establish an artificial position in the processing of soybeans, created through the spread. Since the spread relationship between the futures will vary over time, traders can gain directional exposure to the movements.

Investment dictionary. . 2012.

Look at other dictionaries:

  • Crush spread — A crush spread, in the soybean futures market, is the simultaneous purchase of soybean futures and the sale of soybean meal and soybean oil futures to establish a processing margin. See also Gross processing margin References  This article… …   Wikipedia

  • 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

  • reverse-crush spread — The spread between soya beans and soya bean products created by buying soya bean oil and soya bean meal futures and selling soya bean futures. Exchange Handbook Glossary …   Financial and business terms

  • reverse crush spread — The sale of soybean futures and the simultaneous purchase of soybean oil and meal futures. Chicago Board of Trade glossary …   Financial and business terms

  • spread — v 1.Often spread out stretch, extend, enlarge, widen, broaden, augment, aggrandize, amplify; stretch out, draw out, lengthen, elongate, protract, prolongate, drag out; expand, dilate, distend, swell, bloat; grow, develop, increase, advance,… …   A Note on the Style of the synonym finder

  • spread-eagle — I verb 1. stretch out completely (Freq. 1) They spread eagled him across the floor • Hypernyms: ↑stretch, ↑extend • Verb Frames: Somebody s somebody 2 …   Useful english dictionary

  • Crush, Tear, Curl — Black tea produced through CTC processing Crush, Tear, and Curl (also Cut, Twist, Curl) is a method of processing black tea, similar to that of orthodox tea manufacture. Instead of the leaves being rolled as a final stage, they are passed through …   Wikipedia

  • Spread Option — A type of option that derives its value from the difference between the prices of two or more assets. Spread options can be written on all types of financial products including equities, bonds and currencies. This type of position can be… …   Investment dictionary

  • Intercommodity Spread — Going long on one futures market in a given delivery month and simultaneously going short on the same commodity and delivery month but a different futures market but with similar underlying asset. Examples of intercommodity spreads include the… …   Investment dictionary

  • 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

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