Having trouble with this simple concept.
When the VALUE of the contract is negative, does this mean a loss or gain to the short side?
Reading 51, EOC Q1 states “Because the value is negative, the payment is made BY the short to the long.” So, a loss to the short side.
EOC Q3 states, in reference to a negative value, “this represents a GAIN to the short position.”
It seems like a negative value of the forward contract means that the forward price is high relative to the spot price - so this should mean a LOSS to the party who is LONG the contract (and contracted to buy at that price)…right?