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Currency Forward |
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Currency Forward An agreement between two parties to exchange a certain amount in currencies at a certain rate at a certain time. When a forward contract of any sort is made, terms are negotiated directly between the parties, unlike a futures contract, which trades on an exchange. Partly because there is little secondary market for forward contract, determining the forward price is a zero-sum game: one party will gain on the contract and one will lose. Thus, in a currency forward, each party believes that the prevailing exchange rate will move in a direction favorable to him/her by the expiry of the contract. Currency Forward What Does Currency Forward Mean? A forward contract in the forex market that locks in the price at which an entity can buy or sell a currency on a future date. Also known as an outright forward currency transaction, forward outright, or FX forward. Investopedia explains Currency Forward In currency forward contracts, the contract holders are obligated to buy or sell the currency at a specified price, at a specified quantity, and on a specified future date. These contracts are not transferrable. Related Terms: Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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