What is Forward Contract & How Do Forward Contracts Work | FinSchool by 5Paisa

Learn about forward contracts and how do forward contracts work. In this video, we have explained about the features, advantages and characteristics of forward contracts with the help of illustrated examples. #forwardcontract #finschool #5paisa

A forward contract is derivatives contract whose value is determined by an underlying asset. It is a contract between two parties to buy or sell an asset on a future date at a predetermined price. A forward contract is physically settled, which means it is fulfilled when the goods are exchanged.

This video covers:
00:00 – Introduction
00:10 – What are Forward Contracts?
03:05 – Features of Forward Contract
05:15 – How do Forward Contracts Work
08:14 – Advantages of Forward Contracts
10:38 – What are Payoffs?
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