Exchange of Futures for Cash(redirected from Exchanges for Physicals)
Exchange of Futures for Cash
An agreement between two parties in which a buyer of a commodity exchanges futures contracts for the commodity. Either the buyer gives the seller a certain amount in long position futures or he/she receives from the seller an equivalent amount of short position futures. If there is a difference between the futures and the price of the commodity, it is settled in cash. This transaction is also known as an exchange for physicals.