The amount of deviation in the quality and delivery of an underlying asset that is allowed on a futures contract. The differential can be either a premium or a discount on the par grade of the commodity and also allows for variation on the delivery location specified in the futures contract. forex futures contracts specify the currency and amount, so no differential exists on either the quality or delivery.
Browse by Subjects
rate differential swap
currency carry trade
quanto swap
Strong Basis
See All Related Terms »

commercial law
debenture capital
transaction date
systematic trading