Price of an underlying asset at an agreed later date. – In calm market conditions, it can be assumed that – in commodity markets, the forward price is higher than the corresponding spot price, mainly as a result of the interest, storage and insurance costs associated with holding the commodity, and – the commodity of the nearer dates is cheaper than the same commodity of the farther dates. – Price of a foreign currency in the foreign exchange market in – if not explicitly stated otherwise – ninety days. – See discount, foreign exchange forward, Herstatt risk, spot rate, option, swap rate, forward contract, currency option.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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