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How is a "player to be named later" determined?

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This is a pretty naive question, but it confuses me.  When a team makes a trade for a player to be named later, does the team have any idea who that player will actually be? I assume that they don't know exactly who they are getting, otherwise they would just announce it, right?  Do they basically have a list of guys to choose from and they check out all of those guys and decide which one is best?  If anybody can break this down for me I would be grateful.

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