Credit Risk on a Forward (Schweser book 4) am I crazy? long, receiving, contract, position

Bad5shah

On page 190 of book 4, reading 40, professor’s note:
“In valuing the credit risk associated with a forward contract, it helps to think of hte long position receiving the cash flow under the forward contract and paying the spot market cash flow.”
Is this correct?
If I am long a forward contract, it means I want to buy the underlying in the future at the agreed to rate, thus, I GET the spot market rate to buy in the market place (or rather, I get the underlying at the forward rate, and can choose to sell at the market rate, if it is higher).
I don’t understand this Schweser statement.

RealEstate_CFA

Yep… in a forward contract, when you net cash positions (spot vs forward price), whoever is due money is exposed to credit risk.
If you have a commodity forward and actually expect to take delivery, both sides have counterparty risk (one has risk of not being paid, and the other has risk of not getting what you paid for), although, strictly speaking, only the one at risk of not being paid has “credit risk” the one paying has “delivery risk.” Presumably you don’t have to pay if you don’t get delivery, but if you have 1000 angry customers because you don’t have a key input for your process, then it’s still bad for you.