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...contracts will be fungible at the clearing level...

what does this mean?
From Investopedia:
Goods, securities or instruments that are equivalent and, therefore, interchangeable. In other words, they are goods that consist of many identical parts which can be easily replaced by other, identical goods. If the goods are sold by weight or number, this is a good sign that they are fungible.

Commodities, common shares, or the same company, and dollar bills are examples of fungibles. Fungibility of listed options makes it possible for buyers and sellers to close out their positions by taking offsetting positions. For example, if you buy a long call option, you can close out the position by selling (writing) a put option with the same underlying, expiration date and strike price.

Something that is exchangeable or substitutable. Usually used in the plural.

People think this tax is for Social Security. But tax monies are really fungible. They get raided all the time.
-- Eugene Ludwig, "Motivated to Work," interview by Kerry A. Dolan", Forbes, March 20, 2000

The setting is Ireland in the 1950's, but, a cynical reader might reflect, this sort of fiction is so common that the characters will be completely fungible.
-- Susan Isaacs, "Three Little Girls From School", New York Times, December 30, 1990

Genuine eros makes us desire a particular person; crude desire is satisfiable by fungible bodies.
-- Edward Craig (general editor), Routledge Encyclopedia of Philosophy
in simplistic terms it means 5 mini s&p = 1 big one so you can ask your broker to offset one vs the other with no costs . another example 2 mini dow = 1 10 buck dow .