Non-deliverable forward (NDF) refers to a foreign exchange hedging strategy where the parties agree to settle the profit or loss in a foreign currency futures contract prior to the expiration date of the contract.  The profit or loss is based on the difference between the agreed settlement price and the spot currency price on the settlement date.  Traditionally, the settlement date is two days prior to the expiration of the contract. The settlement currency is most often US dollars.International businesses that need to hedge currency that is trading thinly or is non-convertible often use NDFs to do so.  A NDF allows an investor or borrower to take a position in the currency even though the government may not allow exchanges. The investor or borrower is using the foreign currency, but any foreign exchange gain or loss is paid in US dollars. A sample of currencies that are not allowed to be exchanged are the Argentinean peso, Brazilian real, Chinese renminbi (yaun), Egyptian pound, Israeli shekel, South Korean won, and Taiwanese dollar. NDFs do not have an established market but rather are traded over-the-counter. In 2013, NDFs made up about one fifth of the forward foreign currency exchange market and a very small portion of the entire global foreign exchange trading.  Along with corporations that need to hedge a currency that is not traded internationally, currency traders often use NDFs for speculation.