Intermediate
Cost of carry and a forward price
A forward price can be understood by comparing a future purchase with buying and carrying the asset today. The assumptions determine whether that comparison is usable.
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Forwards Trading Guide
Understand forward contracts, interpret quotes and build currency, commodity and portfolio hedges. Follow ten stages from contract basics to advanced valuation, execution and disciplined risk management.
Start with What a forward contract commits you to, then follow the next lesson links. Explore 40 lessons with worked examples, exercises and further reading.
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Pricing and Valuation · All lessons
Pricing and Valuation
Separate a new forward price from the value of an existing position.
Intermediate
Covered interest parity for currency forwards
A currency forward links two funding markets. Covered interest parity describes an ideal relationship, not a rule that every retail quote must match exactly.
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Intermediate
Forward price versus the value of an existing contract
The rate written in an existing forward stays fixed while its market value changes. A new forward quote is an input to valuation, not a replacement...
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Intermediate
How spot rates funding and time change a forward
Forward values respond to several inputs at once. A sensitivity worksheet helps distinguish an exchange rate view from a funding or timing effect.
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