provided in subsection (b)(1), any real property. (5) Any commodity which is actively traded (within the meaning of section 1092(c)(4)). (6) Any currency. (7) Any rate, price, amount, index, formula, or algorithm. (8) Any other item as the Secretary may prescribe. Except as provided in regulations prescribed by the Secretary to prevent the avoidance of the purposes of this part, such term shall not include any item described in paragraphs (1) through (8). (b) Exceptions (1) Certain real property (A) In general For purposes of this part, the term derivative shall not include any contract with respect to interests in real property (as defined in section 856(c)(5)(C)) if such contract requires physical delivery of such real property. (B) Options to settle in cash (i) In general For purposes of subparagraph (A), a contract which provides for an option of cash settlement shall not be treated as requiring physical delivery of real property unless the option is— (I) not exercisable unconditionally, and (II) exercisable only in unusual and exceptional circumstances. (ii) Option of cash settlement For purposes of clause (i), a contract provides an option of cash settlement if the contract settles in (or could be settled in) cash or property other than the underlying real property. (2) Hedging transactions (A) In general For purposes of this part, the term derivative shall not include any contract which is part of a hedging transaction (as defined in section 1221(b)). (B) Section 988 hedging transactions For exception for section 988 hedging transactions, see section 988(d)(1). (3) Securities lending, sale-repurchase, and similar financing transactions To the extent provided by the Secretary, for purposes of this part, the term derivative shall not include the right to the return of the same or substantially identical securities transferred in a securities lending transaction, sale-repurchase transaction, or similar financing transaction. (4) Options received in connection with the performance of services For purposes of