Forward contract

forward contract investment & finance definition
A non-standardized transaction to buy or sell a specific financial instrument or asset at some period in the future at a specified price.

Forward Contract
A Forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. Therefore, the trade date and delivery date are separated.

Forward Contract
Sometimes used as synonym for "forward deal" or "future". More specifically for arrangements with the same effect as a forward deal between a bank and a customer.
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A forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. Therefore, the trade date and delivery date are separated.

The cash forward contract is a financial agreement between a buyer and a seller. According to the terms of the agreement, the seller makes a covenant to deliver a specified cash commodity at a future point in time.

Foreign currency forward contract
Definition:
Agreement that obligates its parties to Exchange given quantities of currencies at a prespecified Exchange rate on a certain Future date. ...

Forward contract
A cash market transaction in which delivery of the commodity is deferred until after the contract has been made. It is not standardized and is not traded on organized exchanges.
Forward rate ...

Forward contract - A purchase contract that locks in the exchange rate for delivery on a specified future date.

Forward Contract: A cash transaction common in many industries, including commodity merchandising, in which a commercial buyer and seller agree upon delivery of a specified quality and quantity of goods at a specified future date.

Forward Contract
Also called forward, it is an agreement to buy or sell a financial instrument, a commodity, or a security at a specific future date and at a specified price.

Forward Contract - A cashtransaction where the seller agrees to deliver a specificquantity and quality of goods to a specific place sometime in thefuture with prices established according to the contract.

FORWARD CONTRACT A principal-to-principal contract usually entered into by a mining company to sell its gold at a future price for future delivery. Substantially more flexible than a futures contract.

Forward Contract - An agreement between a buyer and a seller to purchase (sell) a particular good at a later date at a fixed price. A forward contract is typically customized to meet the specific needs of the buyer and seller.

Forward Contracts
Lock in an exchange rate for a future settlement date.
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[edit] Forward contracts
A forward contract is an agreement between two parties to exchange at some fixed future date a given quantity of a commodity for a price defined today. The fixed price today is known as the forward price.

Forward Forward Contract:
The simultaneous purchase and sale of a currency for two different dates, each of which occur after the current spot delivery date. Funds are exchanged on each date.

Forward-forward Contract: This is an order to buy or sell a FX instrument on a fixed date at a fixed price and then place an opposite trade at a later date at a fixed price.

Forward contract is trading at a market in OTC. This contract is not unlike the standardized futures contract. For the Forward, the due date, price, quantity are free and are the result of negotiation between seller and buyer.

Forward Contract
An agreement struck today that binds two counterparties to an exchange at a later date. Types of forward contract are currency, equity shares, government securities, etc.

Forward Contract
A contract on which a seller agrees to deliver a specified cash commodity to a buyer sometime in the future. In contrast to futures contracts, the terms of forward contracts are not standardized.

Forward contract
A contract that specifies the price and quantity of an asset to be delivered on in the future. Forward contracts are not standardized and are not traded on organized exchanges.

Forward-forward contract
An order to trade (for example, buy) a Forex instrument at a fixed price on a future date, or to conduct the opposite transaction (for example, sell) at a later date at a fixed price.
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Long-term forward contracts
Contracts that state exchange rate at which a specified amount of a particular currency can be exchanged at a future date (more than one year from today).

cash forward contract A cash market transaction in which a seller agrees to deliver a specific cash... cash in Primarily, cash-in refers to the exchange of one thing for cash. For example,...

A hybrid commercial forward contract for agricultural products that includes a provision guaranteeing the person making delivery a minimum price for the product.

("Quanto swap challenge: the results," Euromoney, October 1994, p. 30.) Quanto Forward A forward contract in which the buyer receives a random number of units of the underlying , and that number depends on another price.

Forward Contract : Sometimes used as synonym for "forward deal" or "futur...
Forward Cover Taking : Forward contracts to protect against movements in ...
Forward Deal : A deal with a value date greater than the spot value date.

FORWARD - A contract (variously known as a "forward contract," forward delivery agreement" or "forward purchase contract") wherein the buyer and seller agree to settle their respective obligations at some specified future date based upon the ...

Deliverable Instrument - The asset delivery in a forward contract, agreed upon by two or more parties referencing the sale and purchase of a specific commodity. The similarity to futures not easily transferred or cancelled.

A managed account or fund in which professional money managers trade futures and forward contracts.

NDF is a cash-settled forward contract on a non-convertible foreign currency for an agreed notional amount.

Futures and forward contracts in addition to hedging are common practice and without them the volatility in the commodities market could potentially cause businesses to fail that would have otherwise managed to survive.

Cash Forward Sale: See Forward Contract.
Cash Market: The market for the cash commodity (as contrasted to a futures contract) taking the form of: (1) an organized, self-regulated central market (e.g., a commodity exchange); ...

In contrast to forward contracts, futures contracts are not usually intended for the actual delivery of the underlying financial instruments, but for trading and hedging purposes.

Futures: Futures contracts are forward contracts, meaning they represent a pledge to make a certain transaction at a future date.

Forward Rate Agreement cash-settled interbank forward contract on interest rates. The seller pays the buyer the difference between the current rate and the agreed-upon rate if the interest rate has risen above the agreed-upon rate.

The that a customer goes bankrupt after entering into a forward contract. In such an event the issuer must close the commitment running the risk of having to pay the marginal movement on the contract.
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Forward contracts impose upon each party the risk that the counterparty will default, but futures contracts executed on a designated contract market are guaranteed against default by the clearing organization.

Examples include futures, options, options on futures, forward contracts, swaps, structured notes, and collateralized mortgage obligations. In that letter, the DOL opined that the products are permissible.

What is the relevance of covered interest rate parity to forward contract pricing? Read answer...
What is the difference between effective interest rates and nominal interest rates? Read answer...

Basis contract - A forward contract in which the cash price is based on the basis relating to a specified futures contract.

The date can be a few days, months, or years but for most cases, it is usually less than one year. Because a forward contract is negotiated between the parties, it is customized to their needs, ...

Examples of derivatives are future contracts, forward contracts and options. Underlying securities can include stocks, bonds or currencies. Derivatives can be traded and are usually used to hedge portfolio risk.

With most market makers today, every trade you make is a forward contract--not a spot trade. What does that mean?

Treasury Notes (Futures), and Euro Forward Contracts. The expense ratio for this fund is 1.10%, and the fund requires a minimum investment of $1,000. The fund carries a front load of 4.50%, and the average return over the past five years was 8.31%.

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Cash Market: A place where people buy and sell the actual commodities, i.e., grain elevator, bank, etc. See Spot and Forward Contract.

Forward trading refers to trading where contracts traded today are settled at some future date at prices decided today. Thus a contract to buy dollars at Rs.42 per dollar after 3 months is a forward contract.

Or One who has sold futures contracts or plans to purchase a cash commodity. (verb) Selling futures contracts or initiating a cash forward contract sale without offsetting a particular market position.

Derivative: Derivatives are financial instruments whose value is based on the market value of an underlying asset such as stocks, bonds or a commodity. Examples of derivatives are futures contracts, options and forward contracts.

A classic example tries to take advantage of the fluid and ever-changing relationships among domestic bond prices, foreign currency denominations, currency spot prices, and forward contracts that make up the theory of "interest rate parity." ...

Forward contracts are not traded on exchanges. Free Riding The practice of buying shares or other securities without actually having the funds to cover the trade. This typically occurs when one closes out a position prior to funds being settled.

Forward/ future contract is an agreement to buy or sell in the future a specific quantity of a commodity at a specific price agreed today; futures contract has the same general features as a forward contract but is transacted through a futures ...

[OTS] buyer's option contract When the buyer has the right to settle a forward contract at his or her option anytime within a specified period.

See also: Contract, Forward, Future, Market, Futures