forward premium (or discount)


Excess (or deficit) resulting from a forward delivery contract in currency trading. Formula: [(Forward rate - spot rate)/spot rate] x (360/number of days in the contract) x 100. A positive percentage value means a forward premium, and a negative percentage value means a forward discount.

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You may want to try and take on a forward premium that may help you earn higher rewards later on.

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As the forward premium on the forward delivery contract increased, the more potential buyers came forward looking to buy the contract from the holder.

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The company was excited about the forward premium of the stock due to the fact that the spot futures were currently trading higher than the current ones.

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