Prepaid Variable Forwards

[FrankCFA]

Prepaid Variable Forwards
A pre-paid variable forward (PVF) is a forward contract in which the investor agrees to sell a specific number of shares in the future at pre-specified future date in return for an upfront cash payment from the counterparty.
Does it mean the investor can get the upfront cash payment immediately and sell the shares later?
Standard forward contract will exchange position at specific date together. Is it the reason it calls variable forward?

 

[Cric12]

The variable here means that the shares he is selling at future date is not fixed..it’s variable. It may be 100 shares or 150 shares or some other number. It’s done mainly to hedge the concentrated stock positions.

 

[FrankCFA]

Got it. Thanks Cric!