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What Is a “Non-Deliverable Forward” (NDF) and How Is It Similar to Cash-Settled Crypto Futures?

A cash-settled forward contract where only the difference between the contract price and the spot price is exchanged, mirroring cash-settled crypto futures.
Greeks.Live22.11.25

What Is a “Non-Deliverable Forward” (NDF) and How Is It Similar to Cash-Settled Crypto Futures?

A Non-Deliverable Forward (NDF) is a cash-settled short-term forward contract, typically used for currencies where transfer is restricted. At maturity, the profit or loss is calculated by comparing the NDF rate to the prevailing spot rate, and the difference is settled in a freely convertible currency.

This is similar to cash-settled crypto futures, where no physical asset is exchanged, only the cash difference.

How Often Is the Funding Rate Typically Calculated and Exchanged on Major Crypto Exchanges?
What Is the Primary Difference between a Physically-Settled and a Cash-Settled Futures Contract?
How Does the Settlement Process Differ between Cash-Settled and Physically-Settled Futures?
What Is the Difference between Physically-Settled and Cash-Settled Crypto Options?

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