Can Two Private Parties Agree to MTM Terms in a Forward Contract?

Yes, two private parties can agree to include MTM terms in their forward contract. This is typically done through a Credit Support Annex (CSA) within a master agreement.

The CSA specifies the collateral to be posted and the frequency of collateral calls, effectively mimicking the MTM process of a futures contract. This is a common practice among large financial institutions to manage credit risk.