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forward dealing


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Dealing in commodities, securities, currencies, freight, etc., for delivery at some future date at a price agreed at the time the contract (called a forward contract) is made. This form of trading enables dealers and manufacturers to cover their future requirements by hedging their more immediate purchases (see hedge). Strictly, a forward contract differs from a futures contract in that the former cannot be closed out by a matching transaction, whereas a futures contract can, and often is. However, this distinction is not always adhered to and the terms are sometimes used synonymously.

Subjects: Financial Institutions and Services — Accounting.


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