Forward Contracts and Swaps

In this section

• Forward Contracts in Practice
  Learn how forward contracts differ from futures and how firms use them to tailor hedging arrangements.
  • How Forward Contracts Differ from Futures
    Compare forwards and futures by customization, exchange trading, clearing, and counterparty exposure.
  • How Forward Contracts Are Used
    Learn how forward contracts are applied to hedge currency, rate, and commodity exposure with customized terms.
• Swap Contracts and Cash Flow Exchanges
  Learn how swaps work as OTC contracts that exchange cash flow patterns, rates, or currencies over time.
  • How Interest Rate Swaps Work
    Understand interest rate swaps as agreements to exchange fixed and floating payment streams on a notional amount.
  • How Currency Swaps Work
    Learn how currency swaps exchange principal and interest in different currencies to manage foreign exchange exposure.
• Key Risks of Forwards and Swaps
  Understand the main OTC derivative risks, including counterparty exposure, liquidity limits, and documentation complexity.