Financial

Forward cover

Forward cover

The purchase in the cash market of the difference between what you are obligated to deliver in a forward contract and the amount of the asset you own. For example, if you agreed to sell 100,000 bushels of corn in September in a forward contract, but you only have 60,000, you need to purchase 40,000 to cover your obligation.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Forward Cover

A purchase of an asset, especially a commodity, in order to be able to deliver a short position on a forward contract. For example, if one sells a forward contract stating that one must deliver 100 barrels of oil and one only owns 90 barrels, one must make a forward cover of 10 barrels of oil to fulfill the contract.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive
FOR FORWARD COVER FOR DEPOSITS (EXCLUDING FE-25 DEPOSITS)
Foreign exchange rates
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