Long Dated Forward

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DEFINITION of 'Long Dated Forward'

A type of forward contract commonly used in foreign currency transactions. Long dated forward refers to contracts that typically involve positions that have settlement dates longer than a year away. Long dated forward contracts are sometimes used by companies to hedge certain currency exposures.

INVESTOPEDIA EXPLAINS 'Long Dated Forward'

Long dated forward contracts can be risky instruments. The holder of these contracts assumes the risk that a counterparty may not hold up their end of the contract. Also, long dated forward contracts on currencies often have larger bid-ask spreads than shorter-term contracts, making their use somewhat expensive.

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