MTM forward contract

[archived_user]

Hi all,
When calculating the MTM of a forward contract, what forward market price should I be using?
1. The forward market price of the commodity when the contract should be maturing?
or
2. Today’s forward market price of the commodity?
Thanks

 

[archived_user]

Say you entered into a 6 month forward contract.
3 months have gone by and you’d like to close the forward position with an offsetting forward position.
you’d choose the forward expiring in 3 months to close your own forward contract that has 3 months left.

 

[archived_user]

= (New Forward Price - Old Forward Price) /( risk free rate)t

 

[archived_user]

Thank you, but when you say New forward market price and Old forward price, you mean New = Market price and old = contract price?

 

[archived_user]

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