Futures Measures

Crack Spread Basics | Crack Spread Contract Specs

Futures Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Crack Spreads represent the margins that oil refineries make by refining oil into gasoline/diesel.

A few weeks prior, Pete went over the basics of crack spreads. In this episode, Pete looks at the different contract specs for futures that can be used in a crack spread and the correlations between the products.

Oil/Gas Futures Contract Specs

A tricky part about crack spreads is that the contracts have different specs as you can see below (crude oil is quoted in $’s per barrels and the refined products are quoted in $’s per gallon).

WTI Crude Oil Futures (/CL) Specs:
Index Multiplier (leverage) - 1,000 (barrels)
Current Price - $54.30/barrel
Notional Value - $54,300
($54.30 x 1,000)
Tick Size - .01 ($10/tick)

NY Harbor ULSD Futures (/HO) Specs:
Index Multiplier (leverage) - 42,000 (gallons)
Current Price - $1.7624/gallon
Notional Value - $74,020
($1.7624 x 42,000)
Tick Size - .0001 ($4.20/tick)

RBOB Gasoline Futures (/RB) Specs:
Index Multiplier (leverage) - 42,000 (gallons)
Current Price - $1.9556/gallon
Notional Value - $82,135
($1.9556 x 42,000)
Tick Size - .0001 ($4.20/tick)

*Values subject to change based on where the market is at

Strategies: Crack Spread

Products Discussed In This Episode: /CL, /HO, /RB

Futures Measures More installments

See All »

Latest tastytrade Videos As of December 13

Most Shared From the last 30 days