What Is a Forward Price?
The forward price is the spot price at the time of the transaction plus the holding cost. It is the delivery price provided by the forward market for a forward contract currently traded. It makes the current value of the forward contract zero.
Forward price
Right!
- Chinese name
- Forward price
- Foreign name
- forward price
- Definition
- Use the spot price at the time of the transaction plus the holding cost
- Factors to consider
- Storage, insurance and transportation
- According to
- Condition of the product
- The forward price is the spot price at the time of the transaction plus the holding cost. It is the delivery price provided by the forward market for a forward contract currently traded. It makes the current value of the forward contract zero.
- Influencing factors
- Depending on the condition of the commodity, factors to consider for holding costs include warehousing, insurance, and transportation. The formula is as follows: forward price = spot or cash price + holding cost. [1]