Exchange for Related Positions (EFRPs)

From MarketsWiki
Revision as of 06:06, 2 August 2013 by SarahRudolph (Talk | contribs)

(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search

Exchange-for-related-position trades allow investors to exchange futures contracts for related cash, physical instrument or off-exchange derivative positions, such as options or swaps contracts.[1]

Types of EFRP transactions include:

  • Exchange for Physical (EFP) - Exchanging a position in the underlying physical instrument for a corresponding futures position.
  • Exchange for Risk (EFR) - Exchanging a position in an over-the-counter (OTC) swap or other OTC derivative in the same or related instrument for a position in the corresponding futures contract.
  • Exchange of Options for Options (EOO) - Exchanging a position in an OTC option (or other OTC contract with similar characteristics) in the same or related instrument for an option position.[2]


References

  1. CFTC Finds Fault at CME. The Wall Street Journal.
  2. Exchange for Related Positions (EFRPs). CME Group.