Forward Market

Forward Market
An over-the-counter marketplace that sets the price of a financial instrument or asset for future delivery. Contracts entered into in the forward market are binding on the parties involved. Forward markets are used for trading a range of instruments including currencies and interest rates, as well as assets such as commodities and securities.

While forward contracts, like futures contracts, may be may be used for both hedging and speculation, there are some notable differences between the two. Forward contracts can be customized to fit a customer's requirements, while futures contracts have standardized features in terms of their contract size and maturity.

The lack of standard features means that forward contracts seldom trade on exchanges, whereas futures contracts are generally exchange-listed. Since forward contracts generally tend to be large in size, the forward market is dominated by financial institutions, government bodies and large corporations.

Investment dictionary. . 2012.

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Look at other dictionaries:

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  • Forward market — A market in which participants agree to trade some commodity, security, or foreign exchange at a fixed price for future delivery. The New York Times Financial Glossary * * * forward market forward market ➔ market1 * * *    Markets that deliver… …   Financial and business terms

  • Forward market — The forward market is the over the counter financial market in contracts for future delivery, so called forward contracts. Forward contracts are personalized between parties. The forward market is a general term used to describe the informal… …   Wikipedia

  • forward market — noun a commodity exchange where futures contracts are traded • Syn: ↑futures exchange, ↑futures market • Hypernyms: ↑commodity exchange, ↑commodities exchange, ↑commodities market * * * forward market noun …   Useful english dictionary

  • forward market — noun (C) technical a market on the stock exchange that buys and sells products at an agreed price on a fixed date in the future; futures market …   Longman dictionary of contemporary English

  • forward market — /fɔwəd ˈmakət/ (say fawwuhd mahkuht) noun a market where traders and speculators contract for purchases and sales of commodities to be delivered at a future date; a futures exchange …  

  • forward market — /ˌfɔ:wəd mɑ:kɪt/ noun a market for purchasing foreign currency, oil or commodities for delivery at a later date. These are one off deals, as opposed to futures contracts which are continuous …   Marketing dictionary in english

  • forward market — /ˌfɔ:wəd mɑ:kɪt/ noun a market for purchasing foreign currency, oil or commodities for delivery at a later date …   Dictionary of banking and finance

  • forward market —   mercato del termine   Mercato in cui tutte le negoziazioni prevedono la consegna differita del bene d investimento …   Glossario di economia e finanza

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