forward market
- noun
- /ˈfɔrwərd ˈmɑrkɪt/
- Specialized
:
mercado a plazo
- Many investors use the forward market to set prices for commodities they plan to purchase three months from now.
These are things like liquid futures and forwards markets, large cap stocks, and vanilla options markets.
- These are things like liquid futures and forwards markets, large cap stocks, and vanilla options markets.
Examples
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In the forward market, traders enter into contracts to buy crops that will be delivered later in the season.
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Erratic, short-term movements of exchange rates may not pose a great problem for international trade and capital movements because exporters, importers, debtors, and creditors can usually hedge in forward markets.
Academic text (1990) -
But forward markets have been wrong about currency adjustment for the past two years, and there is no real indication they are right this time.
Academic text (2005) -
Do not mandate that all purchases be either made in their entirety on the spot market or the forward market.
Academic text (2001) -
It has also been argued, however, that the unpredictability of exchange rates is not important, since everybody can cover in forward markets.
Academic text (1990) -
In other words, the target utilization rate is a simple proxy for the agents' overall market share aspirations and hedging activity in the forward market.
Academic text (2000) -
This is closely tied to a forward market that generators and consumers use to hedge their exposure to volatile prices in the day-ahead market.
Academic text (2000) -
Despite the central importance of the day-ahead market, an equally vital part of the Pool is the forward market where consumers and generators meet voluntarily to trade bilateral contracts.
Academic text (2000) -
The forward market allows companies to secure prices for foreign currency, helping them manage their financial risks.
How Immediate
Surface Forms
Morphology
The compound can be partly interpreted from its parts: 'forward' in a temporal sense plus 'market' suggests a market dealing with future-dated transactions. However, the term refers to a specific financial market for forward/futures contracts (a technical sense), so a B1 learner would grasp only the general idea but not the precise, specialized meaning without exposure.
Etymology
Forward market comes from the simple idea of a market where people agree now to buy or sell something later. The word forward shows the deal is for the 'future' and market is the place where buyers and sellers meet, so the phrase means trading contracts that lock in a price for delivery later.