Exchange of Futures for Cash

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Dictionary Says

Definition of 'Exchange of Futures for Cash'

A method by which opposite parties of a futures contract that has underlying cash commodities aim to close out their positions simultaneously. Also know as exchange for physicals (EFP).
Investopedia Says

Investopedia explains 'Exchange of Futures for Cash'

This process is similar to a swap and can be completed in two ways:

1. Through a transfer of a corresponding quantity of long futures contracts from the buyer of the commodity to the seller.

2. Through a transfer of a corresponding quantity of short futures contracts from the seller of the commodity to the buyer.

In both instances, the transfer of the futures contracts must be done at a price that is mutually agreed upon.
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'Exchange of Futures for Cash'

  • Getting Started in Foreign Exchange Futures

    http://www.investopedia.com/articles/trading/04/102704.asp
    ... and seller are held liable for daily cash settlements ... arguments for and against trading
    in the futures market: Advantages ... Limited to the exchange's session times ...

  • Introduction To Currency Futures

    http://www.investopedia.com/articles/forex/10/introduction-currency-futures.asp
    ... date, at which time the contract is cash-settled or physically delivered, depending
    on the specific contract and exchange. Most currency futures are subject to ...

  • CFA Level 1 Study Guide - Derivatives - Common Characteristics of ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/common-characteristics-futures-forwards.asp
    ... 15.25 Closing and Terminating a Futures Position; 15.26 ... American Options and Moneyness;
    15.28 Exchange Traded Options; ... 15.35 Effect of Cash Flows on Put-Call ...

  • CFA Level 1 Study Guide - Derivatives - Closing and Terminating a ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/closing-terminating-futures-position.asp
    Learn how to close out a futures position. Discusses offsetting, delivery, cash
    settlement or exchange-for-phycials as ways to close out. ...

  • CFA Level 1 Study Guide - Derivatives - Futures Markets Margin ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/futures-markets-margin.asp
    ... 15.25 Closing and Terminating a Futures Position; 15.26 ... American Options and Moneyness;
    15.28 Exchange Traded Options; ... 15.35 Effect of Cash Flows on Put-Call ...

  • An Introduction To Swaps

    http://www.investopedia.com/articles/optioninvestor/07/swaps.asp
    ... exchange-traded futures, forward contracts and swaps SEE: Options Basics A swap
    is an agreement between two parties to exchange sequences of cash flows for a ...

  • CFA Level 1 Study Guide - Derivatives - Futures vs. Forwards ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/futures-versus-forwards.asp
    ... 15.25 Closing and Terminating a Futures Position; 15.26 ... American Options and Moneyness;
    15.28 Exchange Traded Options; ... 15.35 Effect of Cash Flows on Put-Call ...

  • Trading Gold And Silver Futures Contracts

    http://www.investopedia.com/articles/optioninvestor/06/goldsilverfutures.asp
    ... These vaults are subject to change by the exchange. ... If the cash price for gold/silver
    and the futures prices both went down, the hedger would lose on ...

  • CFA Level 1 Study Guide - Derivatives - Exchange Traded Options ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/exchange-traded-options.asp
    ... 15.25 Closing and Terminating a Futures Position; 15.26 ... American Options and Moneyness;
    15.28 Exchange Traded Options; ... 15.35 Effect of Cash Flows on Put-Call ...

  • The Foreign Exchange Interbank Market

    http://www.investopedia.com/articles/forex/06/interbank.asp
    ... and be a member of the National Futures Association (NFA). ... common because even though
    online foreign exchange trading is ... to $100 million at a time (cash on cash ...

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