Exchange for Swap (EFS) Definition


The term Exchange for Swap refers into some privately negotiated trade between the market of a futures contract position for a corresponding Over the Counter exchange. Exchange for Swap is really one of the Exchange for Related Positions (EFRP) trades.


An Exchange to Swap (EFS) is just one of the Exchange to Related Positions (EFRP) trades authorized under Rule 538. An EFS requires the market of a futures contract position for the Over the Counter (OTC) swap between the exact same underlying commodity. In order to run this trade:

  • The buyer (seller) of this OTC swap needs to also function as client (seller) of this futures contract.
  • The total amount of this OTC swap has to be roughly equivalent to the futures contract.
  • The OTC swap needs to have the exact underlying asset specified from the futures contract in addition to exactly the exact same contract .

As may be true with different varieties of EFRPs, the trade does occur because a privately organised exchange in places. The other approved EFRP trades comprise Exchange for Physical (EFP), Exchange of Options for Options (EOO), and also Exchange for Risk (EFR).

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