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!
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.
- Name
- Forward price
- 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
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.
