Forward Contract

What Does Forward Contract Mean?
A cash market transaction in which delivery of the commodity is deferred until after the contract has been made. Although the delivery is made in the future, the price is determined on the initial trade date.

Investopedia explains Forward Contract
Most forward contracts don't have standards and aren't traded on exchanges. A farmer would use a forward contract to "lock-in" a price for his grain for the upcoming fall harvest.

Related Terms

Cash Market
Commodity
Currency Forward
Delivery Date
Derivative
Forward Price
Forward Rate Agreement - FRA
Fraption
Non-Deliverable Forward - NDF
Noon Average Rate Contract - NARC
More Related Terms

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