Forward Spread

Difference between forward price and spot price

Author: Rohan Arora
Rohan Arora
Rohan Arora
Investment Banking | Private Equity

Mr. Arora is an experienced private equity investment professional, with experience working across multiple markets. Rohan has a focus in particular on consumer and business services transactions and operational growth. Rohan has also worked at Evercore, where he also spent time in private equity advisory.

Rohan holds a BA (Hons., Scholar) in Economics and Management from Oxford University.

Reviewed By: Hassan Saab
Hassan Saab
Hassan Saab
Investment Banking | Corporate Finance

Prior to becoming a Founder for Curiocity, Hassan worked for Houlihan Lokey as an Investment Banking Analyst focusing on sellside and buyside M&A, restructurings, financings and strategic advisory engagements across industry groups.

Hassan holds a BS from the University of Pennsylvania in Economics.

Last Updated:April 21, 2022

Forward spread is a trading term used to define the difference in the price of an asset between two time periods. The spread is calculated by taking away the current price of the asset from the future price. It is defined as a forward spread because it is always looking forward.

For example, assume the price of an asset currently is $1.90 and the price of it in one months time is $1.93, the forward spread is 3 basis points.

 

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