Forward Contract

A forward contract is a financial agreement in which the buyer agrees to pay the seller a predetermined price for a specified quantity of a commodity to be delivered at some point in the future.

Forward contracts allow buyers and sellers to know in advance the price as well as the date in which they will take or make delivery of the goods. This knowledge enables them to plan ahead and ultimately they can save expenses - cutting down storage costs for instance.

Forward contracts are privately negotiated, bilateral agreements and the terms of each contract are non-standardized. They are over-the-counter derivatives closely related to futures contracts but they differ in certain aspects.

Ready to Start Trading?

Open an account at and get 100 commission-free trades + free virtual trading tool!

Your new trading account is immediately funded with $5,000 of virtual money which you can use to test out your trading strategies using OptionHouse's virtual trading platform without risking hard-earned money.

Once you start trading for real, your first 100 trades will be commission-free! (Make sure you click thru the link below and quote the promo code '60FREE' during sign-up)

Click here to open a trading account at now!

Join the Discussions @ The Options Forum

Beginners Questions

Advanced Strategy Talks

RSS Feed Widget

Trading Ideas & Opportunities

Home | About Us | Terms of Use | Disclaimer | Privacy Policy | Sitemap

Copyright 2016. - All Rights Reserved.