Main Page | See live article | Alphabetical index A Forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time. One party agrees to buy, the other to sell, for a forward price agreed in advance. In a forward transaction, no actual cash changes hands. If the transaction is collaterised, exchange of margin will take place according to an pre-agreed rule or schedule. Otherwise no asset of any kind actually changes hands, until the maturity of the contract. The forward price of such a contract is commonly contrasted with the spot price, which is the price at which the asset changes hands(on the spot date, usually next business day). See also: Derivative securities Futures contract: a form of forward contract that has been standardised for a wide range of uses. This article is from Wikipedia. All text is available under the terms of the GNU Free Documentation License.