> For the complete documentation index, see [llms.txt](https://eako-capital.gitbook.io/eako-user-guide/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://eako-capital.gitbook.io/eako-user-guide/tarf.md).

# TARF

Target Accrual Redemption Forward; Target Profit Forward

{% hint style="info" %}
The Target Forward is the most basic of the "Target" family of forwards, aimed at providing the client with better-than-market outright hedging rates.

The client will be able to sell EURUSD on a monthly basis at a very attractive strike rate until the Knock-Out Event is triggered.

The Knock-Out Event is triggered when the accumulated Monthly ITM Intrinsic Value is equal to or greater than the Knock-Out Amount.
{% endhint %}

### **Payoff Diagram:**

<figure><img src="https://3557203473-files.gitbook.io/~/files/v0/b/gitbook-x-prod.appspot.com/o/spaces%2FYQ7mk2lqrd7KNTuAuSYT%2Fuploads%2F6gvxDpjKIgyLc3mCXGay%2FRHS%20TARF.png?alt=media&amp;token=5c85aa13-5eff-43ba-86b2-42e3d194c7e6" alt=""><figcaption></figcaption></figure>

### **Payoff at Expiry:**

At expiry if EURUSD fixes:

* Above the Strike, the client is fully protected at the Strike on 100% of the Notional subject to the target condition.  Once the target is reached the strategy is cancelled and the client will become unhedged.
* Below the Strike, the client will find itself obligated to trade at the Strike level on 200% of the Notional.