| Forward Contract |
A cash market transaction in which delivery of the commodity is deferred until after the contract has been made. Although the delivery is made in the future, the price is determined on the initial trade date.
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Most forward contracts don't have standards and aren't traded on exchanges. A farmer would use a forward contract to "lock-in" a price for his grain for the upcoming fall harvest.
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Futures Fundamentals - For those who are new to futures but want a solid understanding of them, this tutorial explains what futures contracts are, how they work, why investors use them, and much more. |
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Related Terms
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