A forward contract is a contract to buy and sell something at a future date. It will normally specify:
- What is the underlying item to be bought and sold?
- Where/how is delivery to be done?
- What shall the price be?
- What amount is to bough/sold?
- Who is the seller?
- Who is the buyer?
A straight forward contract is distinguished from a futures contract by not having any money move between the buyer and the seller as the market price of the underlying change. A margin deposit may sometimes be needed when the contract is entered, but it is not marked to market.