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Non-deliverable forward
| Foreign exchange |
|---|
| Exchange rates |
| Markets |
| Assets |
| Historical agreements |
| See also |
In finance, a non-deliverable forward (NDF) is an outright forward or futures contract in which counterparties settle the difference between the contracted NDF price or rate and the prevailing spot price or rate on an agreed notional amount. It is used in various markets such as foreign exchange and commodities. NDFs are also known as forward contracts for differences (FCD).[1] NDFs are prevalent in some countries where forward FX trading has been banned by the government (usually as a means to prevent exchange rate volatility).
- ^ Khader Shaik (2014). Managing Derivatives Contracts: A Guide to Derivatives Market Structure, Contract Life Cycle, Operations, and Systems. Apress. p. 48. ISBN 978-1-4302-6275-6.
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