What does Forward Contract mean? Read on to discover the definition & meaning of the term Forward Contract - to help you better understand the language used in insurance policies.
An options contract that permits a seller to fix the price of a commodity to be sold on a future date. The benefit to the seller is that it locks in a buyer and a price. The buyer is betting that the market price of the commodity at the specified future date will be greater than that which he or she has contracted to pay, thus creating value.
We hope the you have a better understanding of the meaning of Forward Contract.