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Forward contract

• In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to at a fixed price for future delivery.

• A forward contract is an agreement to exchange an asset (a commodity or a financial asset) at an agreed upon price at an agreed upon date later. Both the cash payment and the exchange of asset takes place in the future. No cash is exchanged at the time contract is made.

• 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. Although the delivery is made in the future, the price is determined at the initial trade date.

 
 Embedded terms in definition
 Asset
Cash market
Cash
Commodity
Contract
Delivery
Exchange
Forward
Future
Market
Maturity
Organized exchange
The exchange
Time
Trade date
Trade
 
 Related Terms
 

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