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A contract to deliver a particular commodity to a buyer sometime in the future.

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9y ago

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A forward contract is a financial agreement between two parties to buy or sell an asset at a predetermined price on a specified future date. It allows the buyer to lock in prices and hedge against price fluctuations, while the seller can secure future revenue. Unlike standardized futures contracts, forward contracts are customizable and traded over-the-counter, which means they carry counterparty risk. Overall, they are used to manage risk in various markets, including commodities, currencies, and financial instruments.