Fungibility

Fungibility is a fundamental concept in finance that describes the ability of a financial asset or commodity to be exchanged or replaced with another identical asset or commodity without any loss of value. When an asset is fungible, each unit of that asset is identical to every other unit, and therefore, is interchangeable and indistinguishable. This means that one unit of the asset is worth the same as any other unit of the same asset.

A good example of fungibility is currency. For instance, a $10 bill can be converted into ten $1 bills, and the value remains the same. This concept is important in finance because it enables the seamless transfer of assets. Buyers and sellers can easily exchange assets without worrying about the differences in quality or other variables, making trading much more efficient.

Start Trading with Vantage

Access markets including forex, commodities, indices, shares and more, at low cost.

Start Trading with Vantage

Access markets including forex, commodities, indices, shares/stocks and more, at low cost.

Start trading CFD stocks by opening a live account here, or practice trading with virtual currency with a demo account.

You can also sign up for our free, weekly webinars that will break down the current markets as well as discuss potential trade set ups for the week.