This corresponds to a binding, simultaneous forward purchase or sale and spot purchase or sale of the same number of shares of the same instrument.
This product is targeted towards two types of investors: (i) the forward buyer, which is the client betting that the price of a given stock will rise and seeking leverage against the market; (ii) the forward seller, which is the client with cash resources that is willing to finance the forward buyer during the period of the simultaneous transaction in exchange for a fee or premium.
Risk: The risks related to simultaneous transactions are different for the forward buyer and the forward seller. In the first case, the client is exposed to the risk of price variations of the stock purchased in the forward contract, plus the considerable risk for leverage over the amount of cash and security guarantees. In the second case, the client is exposed to the risk of default by the forward buyer.