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.

|||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.