How does a forward contract work? More A forward contract is an agreement between two parties to buy or sell an asset at a specified price at a fixed date in the future. Foreign exchange forward contracts are transactions in which two parties make agreements to buy or sell designated currencies at some future dates. This is an exceptional type of currency exchange transaction, where the buyer is hedged against fut Forward contracts involve two parties; one party agrees to ‘buy’ currency at the agreed future date (known as taking the long position), and the other party agrees to ‘sell’ currency at the same time (takes the short position). A forward contract is between a partner of Trade Finance Global and your company.