fungibility definition | Dictionary.com

fun⋅gi⋅ble

[fuhn-juh-buh

–adjective Law.

(esp. of goods) being of such nature or kind as to be freely exchangeable or replaceable, in whole or in part, for another of like nature or kind.

Origin:
1755–65; < ML fungibilis, equiv. to L fung(ī) to perform the office of + -ibilis -ible

Related forms:

fun⋅gi⋅bil⋅i⋅ty, noun

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Based on the Random House Dictionary, © Random House, Inc. 2009.
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Link To fungibility

fun·gi·ble (fŭn'jə-bəl)

adj.

Law Returnable or negotiable in kind or by substitution, as a quantity of grain for an equal amount of the same kind of grain.
Interchangeable.

n. Something that is exchangeable or substitutable. Often used in the plural.

[Medieval Latin fungibilis, from Latin fungī (vice), to perform (in place of).]
fun'gi·bil'i·ty n.

Fungibility

The interchangeability of listed options, futures contracts, and other instruments dependent upon identical terms.

Investopedia Commentary

Fungibility allows buyers and sellers to close out a position through a closing transaction in an identical contract.