Difference between revisions of "Forward contracts"
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(New page: Forward contracts involve a contractual and personal relationship between buyer and seller who negotiate a buy/sell price for a particular commodity or goods. As compared to futures, forwa...) |
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A forward contract is a private, cash-market agreement between a [[buyer]] and [[seller]] for the future [[delivery]] of a commodity at an agreed upon price. Unlike [[futures]] [[contract]]s, forward contracts are not standardized and not transferable. A [[clearing house]] does not stand between[[ buyer]] and [[seller]] to guarantee performance of the forward contract. | |||
Revision as of 13:40, 10 July 2008
A forward contract is a private, cash-market agreement between a buyer and seller for the future delivery of a commodity at an agreed upon price. Unlike futures contracts, forward contracts are not standardized and not transferable. A clearing house does not stand betweenbuyer and seller to guarantee performance of the forward contract.