Exchange for Physicals (EFP)

A regular futures market transaction, in which a futures contract is switched ahead of time for physical or spot gold. There is an active EFP market with dealers quoting bid and offer, usually COMEX active month against loco London spot.

The device is used in the professional market by traders who wish to adjust positions in different markets without making outright purchases or sales; in other words, without changing their net positions. The EFP can also be a trading instrument in its own right.