Finance School of management Features of forward Contracts Two parties agree to exchange some item on a specified future date at a delivery price specified now The forward price is defined as the delivery price which makes the current market value of the contract zero No money is paid in the present by either party to the other .s The face value of the contract is the quantity of the item specified in the contract times the forward price The party who agrees to buy the specified item is said to take a long position, and the party who agrees to sell the item is said to take a short position uesTc3 Finance School of Management ❖ Two parties agree to exchange some item on a specified future date at a delivery price specified now ❖ The forward price is defined as the delivery price which makes the current market value of the contract zero ❖ No money is paid in the present by either party to the other ❖ The face value of the contract is the quantity of the item specified in the contract times the forward price ❖ The party who agrees to buy the specified item is said to take a long position, and the party who agrees to sell the item is said to take a short position Features of Forward Contracts