Forward premium


 

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Forward premium

The difference between a forward exchange rate and the spot exchange rate, expressed as an annualized percentage return on buying foreign currency spot and selling it forward.

Forward premium

A currency trades at a forward premium when its forward price is higher than its spot price.



Forward premium

Similar Matches

Forward sale

Forward sale

A method for hedging price risk that involves an agreement between a lender and an investor to sell particular kinds of loans at a specified price and future time.


Forward foreign exchange contract

Forward foreign exchange contract

Agreement that obligates an investor to deliver a specified quantity of one currency in return for a specified amount of another currency.


Forward interest rate

Forward interest rate

Interest rate fixed today on a loan to be made at some future date.


Forward forward contract

Forward forward contract

In Eurocurrencies, a contract under which a deposit of fixed maturity is agreed to at a fixed price for future delivery.


Forward delivery

Forward delivery

A transaction in which the settlement will occur on a specified date in the future at a price agreed upon on the trade date.


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