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BQLearning - F&O Series: What Is A Forward Contract

BQLearning is a special show that seeks to demystify financial markets, economic theories, legal processes and political structures.

In this series we explain how the most commonly used derivatives - futures and options, work in equity markets, the advantages they offer and the risks associated with them.

What Is A Forward Contract?

A forward contract is not the most common instrument used in equity markets today but it helps us understand a futures contract better. A futures contract is a modified and standardised forward contract, originally used to protect oneself against financial loss or other adverse circumstances.

This video explains a forward contract and its importance in the market place.