Ex pit transaction

(1) For example, one of the parties sells a futures contract and buys the futures contract underlying, while the other buys the futures and sells the underlying. Once the transaction is accepted for clearing, the obligations of the parties as regards the margin and delivery or settlement of the futures contract are the same as in the case of transactions executed normally on the futures market. (2) An exchange for physicals makes it possible to execute a futures transaction away from the trading floor of the exchange (ex pit). It is one of the exceptions to the general prohibition that applies to prearranged trades. (3) The terms used to designate this type of transaction vary depending on the market, which means they cannot be used interchangeably.