Forward Outright

Forward Outright Meaning:
In foreign exchange terminology, a Forward Outright refers to a foreign exchange transaction done for a value date other than spot. Sometimes also called just forwards or forward foreign exchange contracts, Forward Outrights involve buying or selling one currency and simultaneously selling or buying another, with each currency scheduled for delivery on the same value date. They will often be dealt by first dealing value spot, and then performing a currency swap to roll the position out to the desired value date.

Forward Outright contracts will often be used by corporations looking to protect or hedge a known currency exposure due to occur in a certain amount on a specific date. Such contracts generally trade in the over-the-counter forex market, so they can be transacted in customized amounts and value dates out to 10 years. Nevertheless, certain standardized value dates are available in the near-dated interbank market that offer greater liquidity, such as 1 month, 2 months, 3 months, 6 months, 9 months and 1 year.