Forward Contract

If you’re in the market to buy a lot of something that’s price is all over the place, you might want to check out forward contracts. Srsly.

Forward contracts are written and signed by two parties ahead of time. They include info on what’s being sold, how much of it, delivery date, and the price, unlike futures contracts, which are less customizable, and sold on exchanges. Forward contracts are not something you would find via some kind of exchange. Rather, they're usually agreed upon by parties off of any exchange, also called Over The Counter (OTC; yep, like medication).

Forward contracts are good for businesses that rely on commodities with fluctuating prices. They allow buyers to lock the price of something, providing stability. For now.