CFAI Vol 5 Page 184.
Any difference between both? Isnt the basic mechanics same? One is used for Soyabean and other for Oil.
Crak spread is a measure for oil barrel how you convert it into eating oil and gasoline.
Crush spread is being long soybean meal and short soybean oil.
edited : you can trade both strategies so ya pretty much the same mecanics
same I think. calculations are the same anyway.
When inputs are joined together to ge 1 output = Crush
When output is cracked into many inputs = crack …
That’s how i remember these 2 concepts.
From CFAI Text: " Soybeans, for example, can be crushed to produce soybean meal and soybean oil (and a small amount of waste). A trader with a position in soy- beans and an opposite position in equivalent quantities of soybean meal and soybean oil has a crush spread and is said to be “trading the crush.”" (Institute 184) Institute, CFA. Level III 2013 Volume 5 Alternative Investments, Risk Management, and the Application of Derivatives. John Wiley & Sons (P&T), 6/18/2012. . It doesnt say, that crush is combining 2 into one. Here also its just crushing 1 into 2.
I think the only difference is crush is for soybeans, and crack is for oil? I just searched for it on Investopedia, and gave me the same info at least… (buy the one, and sell the two outputs)
They’re identical.
“Crush” and “crack” simply refer to the names of the processes by which several products are derived from a single input.