On the Forex market, the forwards are two tools: the irreversible forward transactions (forward outright deals) and exchange transactions, or swaps. Swap is a combination of transactions on the spot market and a forward transaction irreversible. According to the Bank for international agreements, the sector forward transactions held in 1998, 57% of the foreign exchange market. Expressed in U.S. dollars of the total daily turnover of the foreign exchange market in the $ 1.5 trillion at a fraction of forwards have 900 billion.
Timeframe of the forward contract can be from 3 days to 3 years. In fact, any transaction with a term greater than the term of the transaction on the spot market can be considered a forward agreement provided that for both currencies specified in the contract due at the trading day. Market forwards is decentralized, and its members worldwide, regardless of the type of transactions may operate either directly with each other, or through a broker.
Forward price consists of two main parts: the market value (exchange rates) and the forward spread. The main role in setting prices plays market value. Forward spreads as spreads in the spot market, measured in points (or pips) and represent the difference between bid-and ask-prices. Spread value depends on the term of the forward contract, which thus affects the final size of the forward price.