exchange for physicals (EFP)

Definition of "exchange for physicals (EFP)"
  1. A trade where the buyer swaps a cash commodity for an equivalent in long futures contracts given by the seller, or vice versa, at an agreed price difference, thereby ending both parties' futures hedges
How to use "exchange for physicals (EFP)" in a sentence
  1. This wheat deal is done as an exchange for physicals (EFP), where cash wheat is exchanged for wheat futures.
  2. They used an exchange for physicals (EFP) to close their futures hedges, swapping cash commodities for futures contracts.
  3. The company opted for an exchange for physicals (EFP) to get rid of their futures hedges.

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