fungibility

fungibility definition - finance
The interchangeability of financial instruments, such as futures and options, because the instruments have identical terms. Fungibility allows a trader with an open position to close it out with an identical contract. For example, an S&P 500 futures contract is fungible with another contract that has the same expiration date.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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