A transaction that involves simultaneously taking a cash position and futures position on the same underlying. That means, a position taken in the underlying is traded for a futures position. With this transaction, the long and short position holders agree to delivery terms different from the terms set out in the futures contract, where the buyer of a cash commodity hands over to the seller an equivalent amount of long futures, or receives from the seller an equivalent amount of short futures at a negotiated price difference. That has the effect of closing out the opposite hedges in futures held by both parties.

This transaction is also called exchange of futures for physicals, against actuals, exchange of futures for cash, Ex-Pit Transaction.