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Against Actuals

What does Against Actuals mean?

In the futures market, physical delivery of Actuals, the underlying commodity, is generally required be done on a specified date. But ‘Against Actuals’ is a trade that involves payment of cash rather than making physical delivery.  In an ‘against actual’ trade, a seller may pay in cash, rather than actual physical delivery of the underlying commodity.

Futures Knowledge Explains Against Actuals

This is a hedging transaction in which futures contracts are exchanged for cash contracts. It is an exchange for the physical commodity. Traders having opposite hedged positions offset their positions. A transaction in which the buyer of a commodity transfers to the seller a corresponding amount of long futures contracts, or receives from the seller a corresponding amount of short futures, at a price difference mutually agreed upon. In this way the opposite hedges in futures of both parties are closed out simultaneously.

A transaction where an investor trades a cash position on a commodity for a futures contract on the same commodity. An exchange against actuals is useful when two investors have offsetting, hedged positions they wish to close. An exchange against actuals is also called an exchange against physicals or an exchange versus cash.

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