The delivery price is the price at which one party agrees to deliver the underlying commodity and at which the counter-party agrees to accept delivery. The delivery price is defined in a futures contract traded on a registered exchange or in an over-the-counter forward agreement. The delivery price is set in advance in the contract.
Can you sell a forward contract?
You can't trade forward contracts. The fact that forward contracts are not standardized in amount and are obligatory in nature makes them an efficient way to deal with import/export commodities because any amount can be used in the deal and the accounts receivable or payable information can be expressed in any form of foreign currency.
What is the value of a forward contract?
Value forward contract The value of the contract at a certain time can be calculated in 2 ways. The first way determines the new forward price and discounting the difference with the initial forward price till today. The second possibility is by substracting the present value of the initial forward price from the spot price observed now.
