An outright forward transaction (usually called just “forward”) requires delivery at a future value date of a specified amount of one currency for a specified amount of another currency. The exchange rate is established at the time of the agreement, but payment and delivery are not required until maturity. Forward exchange rates are normally quoted for value dates of one, two, three, six, and twelve months. Actual contacts can be arranged for other numbers of months or, on occasion, for periods of more than one year. Payment is on the second business day after the even-month anniversary of the trade. Thus a two-month forward transaction entered into on March 18 will be for a value date of May 20 falls on a week-end or holiday.
Note that as a matter of terminology we can speak of “buying forward” or “selling forward” to describe the same transaction. A contract to deliver dollars for euros in six months is both “buying euros forward dollars” and “selling dollars forward for euros”.