A Futures Contract’s Forward Price Equals Its Current Futures Price

Summary

The document addresses a conceptual question about the theoretical forward price of a futures contract. Its concise answer is that the forward price of the futures contract is its current market price. This identifies the quoted futures price as the relevant current price when referring to the contract’s forward price.

The answer distinguishes this terminology from determining what the fair current futures price should be. It supplies no cost-of-carry formula, assumptions about rates or margining, or comparison between futures and forward contracts. As a result, it clarifies a basic definition but does not explain how to derive or assess fair value in a particular market.

Key ideas

• The forward price of a futures contract refers to its current futures price.
• Determining a fair current futures price is a separate valuation question.
• The document provides no pricing formula or assumptions for deriving fair value.

Tags

# What is the forward price of a futures contract?


# What is the forward price of a futures contract?












We know how to calculate the theoretical forward price of a stock. But what is the theoretical forward price of a futures contract?

## Answer by ThatDataGuy (score 2)

https://quant.stackexchange.com/a/59603

> But what is the theoretical forward price of a futures contract?

The forward price of the futures contract is equal to the current price of the futures contract. Exactly what the fair current price of the future might be, is another matter.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.