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Forward Swap - Explained

What is a Forward Swap?

Written by Jason Gordon

Updated at April 17th, 2022

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Table of Contents

What is Forward Swap?

What is Forward Swap?

A Forward swap is an agreement whereby two parties exchange or swap assets or cash flows from investments at a specified date in the future. The unique aspect of a forward swap is that the exchange takes place at some point in the future - as opposed to at the time of signing the swap agreement.  

Forward swaps are commonly used in interest rate swap agreements. This is because investors may have a different projection about what interest rates will do in the future. 



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