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Forward contract -optional term

Where an importer is uncertain of delivery date, they are faced with the possibility of an adjustment of the contract rate against them if they take out a fixed term contract and must deliver some considerable time before expiry date.To remove this uncertainty, they may take out a contract with a firm rate quoted for delivery at any time within a stated period, e.g. usually 15 30 days.Delivery within the optional period would be effected at the contract rate, while earlier deliveries would necessitate an adjustment to the rate as is the case for pre-deliveries under fixed term contracts.

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