{{Short description|Informal financial market}} The '''forward market''' is the informal over-the-counter financial market by which contracts for future delivery are entered into. It is mainly used for trading in foreign currencies, where the contracts are used to hedge against foreign exchange risk.<ref>{{cite book |url=https://books.google.com/books?id=I5Z-EAAAQBAJ |page=395 |title=Management |publisher=Arihant Publications |isbn=9326193527}}</ref><ref>{{cite book |url=https://books.google.com/books?id=lLkaCgAAQBAJ&pg=PA99 |page=99 |title=Introduction to Global Business: Understanding the International Environment & Global Business Functions |author1=Julian Gaspar |author2=James Kolari |author3=Richard Hise |author4=Leonard Bierman |author5=L. Murphy Smith |year=2016 |isbn=9781305856226 |publisher=Cengage Learning}}</ref> Commodities are also traded on forward markets. Examples include agricultural products such as rice,<ref>{{cite book |url=https://books.google.com/books?id=2fzJCgAAQBAJ&pg=PA193 |page=193 |title=The International Rice Trade |author=Julian Roche |year=2014 |isbn=9781845692841 |publisher=Elsevier Science}}</ref> and energy futures, such as oil and natural gas.<ref>{{cite book |url=https://books.google.com/books?id=kQdq16hmE9AC&pg=PA211-IA2 |title=Fuel Prices; Twelfth Report of Session 2004-05; Report, Together with Formal Minutes, Oral and Written Evidence |author=House of Commons Trade and Industry Committee |year=2005 |isbn=9780215024992 |publisher=Stationery Office}}</ref><ref>{{cite book |url=https://books.google.com/books?id=13YIQjYxr44C&pg=PA26 |pages=26–27 |title=Risk Management in Commodity Markets; From Shipping to Agriculturals and Energy |year=2009 |isbn=9780470740811 |publisher=Wiley}}</ref> Transactions on a forward market are typically not standardized, and contracts are customised to the needs of the trading parties.<ref>{{cite book |url=https://books.google.com/books?id=vDM8DQAAQBAJ&pg=PA98 |pages=98–100 |title=Global Corporate Finance: A Focused Approach |author1=Suk Hi Kim |author2=Kenneth A Kim |year=2014 |isbn=9789814618021 |publisher=World Scientific Publishing Company|edition=2nd }}</ref><ref>{{cite book |url=https://books.google.com/books?id=ShY3_mtpO5kC&pg=PA150 |page=150 |title=How the Global Financial Markets Really Work |author=Alexander Davidson |year=2009 |isbn=9780749458218 |publisher=Kogan Page}}</ref> In contrast, standardized forward contracts are called futures contracts and traded on a futures exchange.<ref>{{cite book |url=https://books.google.com/books?id=ImLrBwAAQBAJ&pg=PT100 |page=73 |title=International Financial Management |author=Jeff Madura |year=2015 |isbn=9781305840577 |publisher=Cengage Learning}}</ref><ref>{{cite book |url=https://books.google.com/books?id=WCBlH0XDqqEC&pg=PA457 |page=457 |title=Fundamentals of Financial Management |author=Vyuptakesh Sharan |year=2008 |isbn=9788131723975 |publisher=Pearson Education}}</ref>
==See also== *Forward exchange market
==References== {{reflist}}
{{Derivatives market}}
{{DEFAULTSORT:Forward Market}} Category:Financial markets