Forex: Forward Outright Order

A forward outright order is a type of foreign exchange (Forex) transaction in which two parties enter into agreement to trade a currency pair at a future date.

To make this more clear, let's make use of a forward outright order transaction on the EUR/USD currency pair.

Say the current price of EUR/USD is at 1.44 and you enter into a forward outright order with another party.

The two parties will settle on a future date, perhaps weeks or months in the future, to make a forward outright order.

When that date arrives, the forward outright order is carried out and the two parties complete the transaction based on the EUR/USD market price on that date.

In other words, the two parties enter into a forward outright order contract to trade currencies in the future, no matter what the prices may be.

When you trade using forward outright order transactions, it is important to be wary of market volatility. If you aren't careful, a forward outright order can lead to large losses.

When successful, however, forward outright order transactions can reap large profits. Basically, your future outright order gains or losses will be determined by the change in value of the currencies over the time of the contract.