Forward Contract

Business / Taxes / Forward Contract: A forward contract is similar to a futures contract, in the sense that both types of contracts cover the delivery and payment for a specific commodity at a specific future date at a specific price. The difference is that a futures contract has fixed terms, such as delivery date and quantity, and it’s traded on a regulated futures exchange. A forward contract is traded over the counter and all details of the contract are negotiated between the counterparties, or partners to the agreement. The price specified in the forward contract for foreign currency, government securities, or other commodities may be higher or lower than the actual market price at the time of delivery. The market price at delivery is known as the spot price. But the participants have locked in a price early so they know what they will receive or pay for the product, eliminating market risk.

Other Words for Contract

Contract Verb Synonyms: catch, acquire, get, come down with, develop, become infected with, go down with
Contract Adjective Synonyms: agreement, understanding, deal, bargain, arrangement, pact, commitment, obligation, compact
Contract Noun Synonyms: engage, agree, promise, covenant, undertake
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Other Words for Forward

Forward Adverb Synonyms: advance, further, promote, back, foster, support, aid, assist, help, patronize, encourage, nourish, nurse along
Forward Noun Synonyms: advance, leading, foremost, front, head, first
Forward Verb Synonyms: speed (up), accelerate, advance, hasten, expedite, hurry, quicken, step up
Forward Adjective Synonyms: (well-)advanced, (well-)developed, progressive, precocious, forward-looking
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Forward Cover

Business / Finance / Forward Cover: 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 MORE

Forward Delivery

Business / Finance / Forward Delivery: The purchase in the cash market of the difference between what you are obligated to deliver in a forward contract and the amount of the asset you own. For example, if you agreed to sell 100,000 bushel MORE

Forward Selling

Business / Agriculture / Forward Selling: Forward contracting in which the price is fixed at the time the contract is entered. MORE

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