LeoGlossary: Forward (Financial)

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How to get a Hive Account

A non-standardized contract between two parties to buy or sell an asset at a specified future time at a price agreed on at the time of conclusion of the contract. This is a derivative.

It is similar to a futures contract with the exception of being standardized. The futures market has exchanges which establish standard terms for each contract. With a forward, the two parties decide on the amount that is applied.

Forwards are traded on the over-the-counter (OTC) market. Futures obviously go through exchanges.


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