A forward contract in which the seller (the short) agrees to deliver a specific bond to the buyer (the long) at a set price and at a certain future date. This forward contract is not traded on on an exchange, but rather it is privately negotiated by the two counterparties. Therefore, it is said to be non-standardized, i.e. the two counterparties are free to agree on their own conditions and specifications.

The underlying of a bond forward contract can be any type of corporate bonds or government bonds, such as treasury bonds, discount bonds, zero-coupon bonds, etc.