Forward Contracts Sample Clauses

Forward Contracts. The Company may make extensive use of forward contracts. Forward contracts are transactions involving an obligation to purchase or sell a specific instrument or entitlement at a future date at a specified price. Forward contracts may be used by the Company for hedging purposes, such as to protect against uncertainty in the level of future foreign currency exchange rates. Forward contracts may also be used to attempt to protect the value of the Company’s existing holdings of securities held in currencies other than the base currency of the relevant Portfolio. As is the case for any attempt at hedging downside risk, there is a risk that there is an imperfect correlation between the value of the securities and the forward contracts entered into with respect to those holdings resulting in an unprotected loss. Forward contracts may also be used for investment, non-hedging purposes to pursue the Company’s investment objective, for example where it is anticipated that a particular currency will appreciate or depreciate in value. Forward contracts and options thereon, unlike futures contracts, are not traded on exchanges and are not standardised; rather, banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. However, certain forward currency exchange contracts are regulated as swaps by the CFTC and are being voluntarily traded on swap execution facilities. To the extent the Investment Manager's swap counterparty is a US person (for the purposes of the CFTC's swap regulations), some of these contracts may be required to be centrally cleared by a regulated US clearinghouse, and may be required to be traded on regulated exchanges or execution facilities in the future. See 'Enhanced regulation of the OTC derivatives markets', below. Interbank forward and “cash” trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. As in the case of a futures contract, a forward usually only requires a much smaller amount of margin to be provided relative to the economic exposure which the forward contract provides to the relevant investment; it creates a ‘gearing’ or ‘leverageeffect. This means that a small margin payment can lead to enhanced losses as well as enhanced gains. It also means that a relatively small movement in the underlying instrument can lead to a much greater proportional movement in the value of the forward contract. The principal...
Forward Contracts. Forward contracts are foreign currency exchange contracts. They are used to buy or sell foreign currency for future delivery at a fixed price. The Fund uses them to "lock in" the U.S. dollar price of a security denominated in a foreign currency that the Fund has bought or sold, or to protect against possible losses from changes in the relative values of the U.S. dollar and a foreign currency. The Fund limits its exposure in foreign currency exchange contracts in a particular foreign currency to the amount of its assets denominated in that currency or a closely-correlated currency. The Fund may also use "cross-hedging" where the Fund xxxxxx against changes in currencies other than the currency in which a security it holds is denominated. Under a forward contract, one party agrees to purchase, and another party agrees to sell, a specific currency at a future date. That date may be any fixed number of days from the date of the contract agreed upon by the parties. The transaction price is set at the time the contract is entered into. These contracts are traded in the inter-bank market conducted directly among currency traders (usually large commercial banks) and their customers. The Fund may use forward contracts to protect against uncertainty in the level of future exchange rates. The use of forward contracts does not eliminate the risk of fluctuations in the prices of the underlying securities the Fund owns or intends to acquire, but it does fix a rate of exchange in advance. Although forward contracts may reduce the risk of loss from a decline in the value of the hedged currency, at the same time they limit any potential gain if the value of the hedged currency increases. When the Fund enters into a contract for the purchase or sale of a security denominated in a foreign currency, or when it anticipates receiving dividend payments in a foreign currency, the Fund might desire to "lock-in" the U.S. dollar price of the security or the U.S. dollar equivalent of the dividend payments. To do so, the Fund could enter into a forward contract for the purchase or sale of the amount of foreign currency involved in the underlying transaction, in a fixed amount of U.S. dollars per unit of the foreign currency. This is called a "transaction hedge." The transaction hedge will protect the Fund against a loss from an adverse change in the currency exchange rates during the period between the date on which the security is purchased or sold or on which the payment is declared...
Forward Contracts. 20.1 Where you wish to enter into a Forward Contract, we may require you to make an initial Margin payment within twenty-four (24) hours of you receiving the Transaction Receipt.
Forward Contracts. Buyer and Seller shall acknowledge that it is a “forward contract merchant” and that all transactions pursuant to this Contract constitute “forward contracts” within the meaning of the United States Bankruptcy Code.
Forward Contracts. 22.1. From time to time we may agree to enter into a Forward Contract with you. You understand and agree that:
Forward Contracts. The Customers and the Metal Lender may from time elect to time enter into Forward Contracts in form and substance and on terms, including pricing, as are mutually satisfactory to the Metal Lender and the Customers, so long as at such time (a) no Default has occurred and is continuing, (b) the aggregate stated face value or notional amount, as applicable, of all Forward Contracts then in effect does not exceed $5,000,000, and (c) the Forward Contract Exposure does not exceed at such time the Forward Contract Limit. If the Forward Contract Exposure at any time exceeds the Forward Contract Limit, the Customers will promptly, without further notice or demand by the Metal Lender, make payment to the Metal Lender, or amend one or more Forward Contracts to reduce the applicable stated face amount or notional amount thereof, in either case, in an amount sufficient to result in the remaining Forward Contract Exposure being not more than the Forward Contract Limit. Unless otherwise agreed by the Metal Lender, no Forward Contract shall have a maturity in excess of twelve (12) months or later than the Maturity Date.
Forward Contracts. The Parties acknowledge and agree that all Transactions constitute “forward contracts” within the meaning of the United States Bankruptcy Code and the Parties further acknowledge and agree that BUYER and SELLER are each “forward contract merchants” within the meaning of the United States Bankruptcy Code.
Forward Contracts. The Company does not have any unmatched open positions with respect to forward purchases and/or sales of any commodity, stock or foreign currency and none of such open positions will involve the Company in a loss.
Forward Contracts. A forward contract locks-in the price at which an index or asset may be purchased or sold on a future date. In currency forward contracts, the contract holders are obligated to buy or sell the currency at a specified price, at a specified quantity and on a specified future date, whereas an interest rate forward determines an interest rate to be paid or received on an obligation beginning at a start date sometime in the future. Forward contracts may be cash settled between the parties. These contracts cannot be transferred. The Sub- Funds' use of forward foreign exchange contracts may include, but is not be limited to, altering the currency exposure of securities held, hedging against exchange risks, increasing exposure to a currency, shifting exposure to currency fluctuations from one currency to another and hedging Classes denominated in a currency (other than the base currency of the relevant Sub-Fund) to the base currency of the relevant Sub- Fund (as set out in Annex A). Swaps The Management Company may on behalf of the relevant Sub-Fund enter into swaps for the account of the relevant Sub-Fund, provided that the investment principles are adhered to. A swap is an agreement between two parties that involves the swapping of cash flows, assets, income or risks. The swap transactions that may be concluded for the relevant Sub-Fund include interest-rate, currency, asset, equity, credit default swaps and Total Return Swaps. This is not an exhaustive list. An interest-rate swap is a transaction involving two parties swapping cash flows that are based on fixed or variable interest payments. This transaction is comparable to the raising of funds at a fixed interest rate while at the same time lending funds at a variable interest rate, with the nominal amounts of the assets not being exchanged. Currency swaps usually involve the swapping of the nominal amounts of the assets and may be equated to the raising of funds in one currency while at the same time lending funds in another. Asset swaps (often referred to as "synthetic securities") are transactions that convert the yield from a specific asset to another interest rate flow (fixed or variable) or to another currency by combining the asset (e.g. bond, floating-rate note) with an interest-rate or currency swap. An equity swap is characterized by the swapping of cash flows, changes in value and/or returns from an asset for cash flows, changes in value and/or returns from another asset, with at least one of the s...
Forward Contracts. Forward Contracts A forward contract is an agreement between two individuals in which one party agrees to buy an asset from the other party for a predetermined price on a predetermined date. The price of the asset is decided upon when the contract is entered into, but is not paid until the transaction actually takes place. Some terminology relating to forward contracts is provided below. • The expiration date is the date on which the actual sale will take place. • The forward price is the amount that will be paid for the asset on the expiration date. • The party obligated to purchase the asset benefits if the value increases, and is thus in a long position with respect to the underlying asset. As such, we say that the buyer has entered into a long forward. • The party obligated to sell the asset benefits if the value decreases, and is thus in a short position with respect to the underlying asset. As such, we say that the seller has entered into a short forward. • A spot price is the price of the asset on any specific date (most importantly at expiration). • The payoff to either party involved in a forward contract is the value of the contract to that party on the expiration date. If the forward price is F0, T and the spot price at expiration is ST , then the payoffs are: ◦ Long Forward Payoff: ST − X 0,X ◦ Xxxxx Xxxxxxx Xxxxxx: F0, T − ST Prepaid Forward Contracts A prepaid forward contract is similar to a standard forward contract, except that the buyer pays the seller of the asset when the contract is entered into, as opposed to when the contract is fulfilled. As a result, the prepaid 0, T forward price of an asset, denoted by FP , is equal to the present value of the forward price of the asset, F 0,T . Forward Prices The economicLaw of one Price” can be used to find formulas for arbitrage-free forward and prepaid forward prices. The following table summarized these prices under a variety of circumstances. X 0,X X X 0,X Stock does not pay dividends r T S 0 e S 0 Stock pays discrete dividends r T S 0 e − AV( Divs) S 0 − PV(Divs) Stock pays dividends continuously at a rate of δ S 0 e( − δ) r T −δ T S 0 e 0, T Notice that in every row in the table above, we have that F P = PV ( F 0,T ) . Forwards on Currency Forward contracts are occasionally used to lock in exchange rates of future currency exchanges. The formulas involved with working with currency forwards are no different from other forwards, but do tend to require some symbolic substitutions. The det...