A type of securities that are interchangeable with other securities belonging to the same class or series. In other words, it refers to such securities which are replaceable by others of the same features (series, class) without any impact on the rights attributable or attached to such securities. Fungibility is a feature of interchangeability either at the time of issue or shortly  thereafter, involving an already seasoned issue (by the same firm/ obligor).

Most financial securities are fungible: a share of stock in a particular firm is identically the same as another share in the same firm (of course, if both belong to the same class if the firm has more than one class, etc.)

In another different context, fungible securities are those perceived as not being individually recognized or assigned to a specific holder. For example, futures and options exchanges offer fungibility where an opening transaction can be offset by a closing transaction on the same exchange, possibly involving two different counterparties, eventually (by means of novation). An exchange can assume the role of a counterparty to any specific transaction, while matching takes place to identify the right ultimate counterparty.