Crack Spread in Forex
A clear definition of Crack Spread, with practical context for reading markets and making better trading decisions.
Definition
Definition
The crack spread is the price relationship between crude oil and refined petroleum products such as gasoline and heating oil. It is used as a rough market measure of refining economics rather than as the bid-ask spread on a single instrument.
How It Works
Electronic markets separate the price you see, the instruction you send, and the final execution you receive. Available liquidity, order type, venue rules, and market movement can all affect what happens between those steps.
Why It Matters
This vocabulary lets you read a broker or platform screen accurately. The goal at Level 2 is mechanical literacy - knowing what a displayed price, order status, or execution record means - rather than predicting the market.
Key Takeaway
The crack spread is the price relationship between crude oil and refined petroleum products such as gasoline and heating oil.
Practical forex example
Why Crack Spread matters
Understanding Crack Spread helps traders interpret market information, plan decisions, and manage risk with more context.
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