what is forward contract 
a forward contract is an agreement between a buyer and seller to trade an asset usually a currency at a mutually agreed upon fixed price and set date unlike futures contracts forward contracts are private arrangements between the buyer and seller and as such they are not traded on the centralized exchange but rather are considered part of the otc market this makes forward contracts a riskier venture than futures contracts the primary factors in determining the price of a forward contract are the market value of the asset and the time at which point the contract will be fulfilled which is influenced by the swap rates 