The payoffs to both the long and short position in the forward contact are symmetric around the contract price.

Question

Quizplus · Accepted Answer

The payoffs to both the long and short position in a forward contract are symmetric around the contract price, which means that each time the price moves below the contract price, the long position gains and the short position loses an equal amount, and each time the price moves above the contract price, the short position gains and the long position loses an equal amount. This symmetry continues until the maturity date of the contract.

The Payoffs to Both the Long and Short Position in the Forward