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differential

   Also found in: Dictionary/thesaurus, Medical, Acronyms, Encyclopedia, Wikipedia, Hutchinson 0.06 sec.
Differential
The amount of adjustment of the delivery location and grade of deliverables that a futures contract permits. Also known as "allowance. "

Notes:
Some futures contracts allow the short position to adjust the location of the delivery and/or the grade of commodity being delivered. The permitted differentials are set in relation to a central location or the par basis grade.


Differential
A small charge added to the purchase price and subtracted from the selling price by the dealer for odd-lot quantities.

differential
1. In commodities trading, the premium or discount in the futures contract price caused by delivering a commodity that does not exactly meet the standards fixed by the exchange. Allowances for these differentials are included in the contract specifications.

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