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In finance, a non-deliverable forward (NDF) is an outright forward or futures contract in which counterparties settle the difference between the contracted NDF price or rate and the prevailing spot price or rate on an agreed notional amount. It is used in various markets such as foreign exchange and commodities.
Here, the forward price represents the expected future value of the underlying discounted at the risk-free rate—as any deviation from the theoretical price will afford investors a riskless profit opportunity and should be arbitraged away. We define the forward price to be the strike K such that the contract has 0 value at the present time.
In finance, a forward contract, or simply a forward, is a non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on in the contract, making it a type of derivative instrument.
The forward price (or sometimes forward rate) is the agreed upon price of an asset in a forward contract. [1] [2] Using the rational pricing assumption, for a forward contract on an underlying asset that is tradeable, the forward price can be expressed in terms of the spot price and any dividends. For forwards on non-tradeables, pricing the ...
Non-deliverable Cross-Currency Swap (NDXCS or NDS): similar to a regular XCS, except that payments in one of the currencies are settled in another currency using the prevailing FX spot rate. NDS are usually used in emerging markets where the currency is illiquid, subject to exchange restrictions, or even non-convertible. This associates with ...
For a trade with time to expiry of y months, the expiry date is found by first calculating the spot date, then moving forward y months from the spot date to the delivery date. If the delivery date is a non-business day or a US holiday, move forward until an acceptable delivery date is found.
In a non-discretionary account, a broker has no independent authority to execute trades. They can only buy and sell assets at their client’s instructions and have a duty to do so at the best ...
A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts defined by the exchange. [1] Futures contracts are derivatives contracts to buy or sell specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future.