Prepaid variable forward
Certified Financial Planner glossary · Certified Financial Planner
Definition
A contract advancing cash today against future delivery of a variable number of shares.
Prepaid variable forward in plain English
A concentrated stockholder needs cash now but is not ready to dump the entire block in one taxable sale. A prepaid variable forward advances cash today against future delivery of a variable number of shares, so the share count delivered later floats with price while the client gets liquidity up front. Hold the definition: a contract advancing cash today against future delivery of a variable number of shares. Do not confuse it with an outright sale, a collar alone, or a fixed-share forward that locks quantity from day one.
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