Forward Swap

Investors can be procrastinators, too. Rather than swapping now, two parties can make a contract, writing out all the deets, but swap later, with an agreement called a forward swap.

Forward swaps usually set the swap day more than a few days out (more like a few months out). Forward swaps can be swapping anything really...assets, currencies, interest rates, lunch...whatever they decide is worth it to write up an agreement for.

The most common of all the forward swaps is the forward interest rate swaps, which big companies can use to mitigate risk and keep their ducks in a row. Interest rate swaps are when two parties decide to trade cash flows that are based off of certain interest rates. Putting interest rate swaps in the future with forward swaps allow companies to lock in interest rates and exchange rates for some stability.

Make money; don't lose it. "Forward swaps" => financial condoms.