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Personal cabinetThe role of prepayment in the structure of deferred pricing forward contracts: credit and price risk analysis
Bibliographic description of the article for the citation:
Lesyk Ruslan. The role of prepayment in the structure of deferred pricing forward contracts: credit and price risk analysis//Science online: International Scientific e-zine - 2022. - №6. - https://nauka-online.com/en/publications/economy/2022/6/07-28/
Annotation: The article examines how prepayment affects the structure of forward contracts with deferred pricing. This tool allows you to distribute credit and price risks between the parties. The analysis shows that prepayment reduces the risk of non-payment for the recipient, but at the same time increases the likelihood of non-repayment of funds and creates liquidity constraints for the payer. And in the case of an "open price", it can increase the conflict of interests around its fixation. The findings can be used to develop prepayment conditions, types of collateral, and price fixing rules to increase the stability of transaction execution.