Against Actual

It might sound like an irrational dedication to fantasy. But it really has to do with commodities trading.

In commodities, an "actual" is the physical thing getting traded. Oil, gold, soybeans, pork bellies, etc. However, not all commodities trading involves buying and selling actuals. Much of the action takes place on the derivatives market, where traders speculate in the prices of various commodities, but have no intention of ever receiving, say 1,000 barrels of oil or a bunch of pig meat.

"Against Actual" is a type of trade that avoids the physical delivery. In the transaction, two parties with opposite positions in a commodity make a deal to use each other to close out their contracts simultaneously. A person with a buy-side contract and one with a sell-side contract let the two cancel each other out. That way, no one has to ship any pork to anyone else.