forward contract

Definition of "forward contract"
  1. An agreement made privately where a purchaser promises to buy an item, which could be a certain quantity of a commodity, security, or currency, at a fixed cost on a specific future date
How to use "forward contract" in a sentence
  1. The company entered into a forward contract to buy wheat at a fixed price six months from now to hedge against possible price increases.
  2. To secure her investment, the investor purchased euros in a forward contract, to be delivered at a specified price on a specific date in the future.
  3. The manufacturer protected its budget by entering a forward contract to purchase raw materials at a set price in a year's time.

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