Financial Glossary what is fungibility


Fungibility

Interchangeability usually resulting from standardisation. Futures and options contracts for the same commodity and delivery month are fungible due to their standardised specifications for quality, quantity, delivery date and delivery locations. Over-the-counter products such as swaps and forwards are generally are not fungible. New government bonds issues are often designed to be fungible with existing issues to increase the appeal and marketability of the bonds.
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