Differential
The amount of adjustment of the delivery location and grade of deliverables that a futures contract permits. Also known as "allowance. " Investopedia Says:
Some futures contracts allow the short position to adjust the location of the delivery and/or the grade of commodity being delivered. The permitted differentials are set in relation to a central location or the par basis grade.
Related Terms:
Actual
Approved Delivery Facility
Basis Grade
Certificated Stock
Delivery Instrument |