Forward Swap

What Does Forward Swap Mean?
A swap agreement created through the synthesis of two swaps differing in duration for the purpose of fulfilling the specific time-frame needs of an investor. Also referred to as a "forward start swap," "delayed start swap," and a "deferred start swap."

Investopedia explains Forward Swap
For example, if an investor wants to hedge for a five-year duration beginning one year from today, this investor can enter into both a one-year and six-year swap, creating the forward swap that meets the needs of his or her portfolio. Sometimes swaps don't perfectly match the needs of investors wishing to hedge certain risks.

Related Terms

Currency Swap
Interest Rate Swap
Swap
Swap Rate
More Related Terms

Related Links

An Introduction To Swaps - Learn how these derivatives work and how companies can benefit from them.
Forex: Gauging Forex Market Sentiment With Open Interest - Examining open interest on currency futures can help you confirm the strength of a trend in forex market sentiment.
How does the forex market trade 24 hours a day?
GFT Futures - Trade all futures markets with our award-winning software. Try it free today.
Explosive Gains In Forex – Learn what makes the currency markets move with your exclusive free report!
Free Futures Trading Package - The great free give away to serious futures traders. Includes a CD-ROM and book.
Question about futures? Lind-Waldock can help. - Our Lind Plus market strategists offer advice and tailor-made trading strategies in our free Ask a Broker Q&A reference guide.

Rate this Term: Your Rating: Overall Rating: Vote Now!