Fungibility in securities means that units of the same class are treated as equivalent, so one may be delivered or transferred in place of another without altering the holder’s economic position. The characteristic generally applies to shares or debt instruments issued under the same terms and carrying the same rights. Individual units consequently have no separate economic identity for ownership, trading or settlement purposes.
Source: European Central Bank (ECB) (source). This glossary entry is an independently worded adaptation of the cited information.