A Derivative Instrument: What is a Forward Contract?March 18th, 2024
FiledMarch 18th, 2024Forward contracts are financial agreements that foresee the purchase or sale of an asset or financial instrument at a predetermined price on a specified date between two parties. These contracts are typically made on various financial instruments such as currencies, interest rates, commodities, and stocks. Forward contracts allow the parties to protect themselves against future price fluctuations and are commonly used for risk management purposes.