Commodity-Product Spread

外汇网2021-06-19 14:37:10 87

The commodity-product spad is the difference between the price of a raw material commodity and price of a finished product created from that commodity. A common commodity-product spad is the "crack spad". This is the spad between the price of crude oil and the price of refined oil products.

Betting on changes in the commodity-product spad 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.

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