The exchange for physicals (EFP) facility is an off-market trading mechanism that enables customers to swap futures and options exposure for an offsetting physical position. It offers the flexibility and certainty of an over-the-counter (OTC) market, plus the counterparty guarantee of an exchange market. EFPs are approved on the basis of the notional value of the offsetting physical and futures legs being equal.
The EFP mechanism is an invaluable tool for all types of investors, from fund managers equitising cash to arbitrageurs taking advantage of pricing anomalies. Customers are afforded the benefits of an ASX off-market trading facility, such as pre-trade price and execution certainty.