EXCHANGE FOR PHYSICAL

exchange for physical: translation

The exchange between two customers of a physical and futures position, which is agreed directly between the two parties outside of the exchange on which the futures are dealt. EFPs are reported to the exchange, and documentary evidence of a physical transfer of goods may be required by the exchange. Also known as against actuals on the LIFFE Commodity market. Dresdner Kleinwort Wasserstein financial glossary

   This occurs where the buyer of a cash commodity transfers to the seller an equivalent amount of long-futures contracts, or receives from him a corresponding amount of short futures at an agreed price. Also termed exchange for cash, and against actuals.