Forward Price

Dictionary Says

Definition of 'Forward Price'

The predetermined delivery price for an underlying commodity, currency or financial asset decided upon by the long (the buyer) and the short (the seller) to be paid at predetermined date in the future.

At the inception of a forward contract, the forward price makes the value of the contract zero.
     
The Forward Price can be determined by the following formula: 

Forward Price

 
where:
S0 represents the current spot price of the asset
F0 represents the forward price of the asset at time T
er represents a mathematical exponential function  
Investopedia Says

Investopedia explains 'Forward Price'

Taking positions in a  forward contract is a zero-sum game. For example, if Joe takes a long position in a pork belly forward agreement and Jane takes a short position in a forward agreement, any gains that Joe makes in the long position equal the losses that Jane incurs from the short position. By initially setting the value of the contract's value to zero, both parties are on equal ground at inception of the contract.
Search results for

'Forward Price'

  • Gap's Comeback Deserves Inspection

    http://stocks.investopedia.com/stock-analysis/2009/Gaps-Comeback-Deserves-Inspection-GPS1125.aspx
    ... this year's $1.06 estimate. In short, I think Gap's relatively low forward
    price to earnings multiple is a plus. It makes me think ...
  • CFA Level 1 Study Guide - Global Economic Analysis - Forward ...

    http://www.investopedia.com/exam-guide/cfa-level-1/global-economic-analysis/forward-market.asp
    ... are Forward Rates? 14.45 Forward Rates vs Spot Rates; 14.46 Measuring Interest
    Rate Risk; 14.47 Price Volatility; 14.48 Effective, Modified ...
  • CFA Level 1 Study Guide - Derivatives - Forward Markets and ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/forward-markets-contracts-settlement-procedures.asp
    ... are Forward Rates? 14.45 Forward Rates vs Spot Rates; 14.46 Measuring Interest
    Rate Risk; 14.47 Price Volatility; 14.48 Effective, Modified ...
  • CFA Level 1 Study Guide - Derivatives - Equity Forward Contracts ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/equity-forward-contracts.asp
    ... are Forward Rates? 14.45 Forward Rates vs Spot Rates; 14.46 Measuring Interest
    Rate Risk; 14.47 Price Volatility; 14.48 Effective, Modified ...
  • CFA Level 1 Study Guide - Derivatives - Forward Contracts on Bonds ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/forward-contracts-on-bonds.asp
    ... are Forward Rates? 14.45 Forward Rates vs Spot Rates; 14.46 Measuring Interest
    Rate Risk; 14.47 Price Volatility; 14.48 Effective, Modified ...
  • What is the difference between forward and futures contracts?

    http://www.investopedia.com/ask/answers/06/forwardsandfutures.asp
    ... Fundamentally, forward and futures contracts have the same function: both types
    of contracts ... sell a specific type of asset at a specific time at a given price. ...
  • 4 Attractive Tech Stocks Heading Into 2012

    http://stocks.investopedia.com/stock-analysis/2012/Four-Attractive-Tech-Stocks-Heading-Into-2012-N-FIRE-MELI-SWI0103.aspx
    ... high valuation. The forward price to earnings (P/E) ratio is 47.6 and the
    price/earnings to growth (PEG) ratio is a high 3.0. Both ...
  • Companies Buying Their Own Shares

    http://stocks.investopedia.com/stock-analysis/2010/Companies-Buying-Their-Own-Shares-DOX-GPN-IBM-MVC-ORB0503.aspx
    ... multiple of 10.5. Also digging into forward price to earnings Amdocs Ltd.
    (NYSE:DOX) sits around 13. Amdocs Ltd. has beat earnings ...
  • CFA Level 1 Study Guide - Derivatives - Forward Contracts ...

    http://www.investopedia.com/exam-guide/cfa-level-1/derivatives/forward-contracts.asp
    ... are Forward Rates? 14.45 Forward Rates vs Spot Rates; 14.46 Measuring Interest
    Rate Risk; 14.47 Price Volatility; 14.48 Effective, Modified ...
  • CFA Level 1 Study Guide - Macroeconomics - Monitoring Cycles, Jobs ...

    http://www.investopedia.com/exam-guide/cfa-level-1/macroeconomics/business-cycle.asp
    ... are Forward Rates? 14.45 Forward Rates vs Spot Rates; 14.46 Measuring Interest
    Rate Risk; 14.47 Price Volatility; 14.48 Effective, Modified ...

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