Forward Price Calculator
The forward price is the no-arbitrage price agreed today for future delivery of an asset. It follows directly from the cost-of-carry relationship: hold the asset to maturity and you earn its income but forgo interest on the cash, so the forward price equals the spot grown at the net carry. This calculator uses continuous compounding. Enter the spot price, the risk-free rate, the income or convenience yield and the time to maturity.
Forward price formula
F = S * e^((r - q) * T)
Basis = F - S
where S = spot, r = risk-free rate, q = income/carry yield, T = years to maturity
Rates r and q are entered as percentages and converted to decimals. When r exceeds q the forward trades above spot (contango); when q exceeds r it trades below spot (backwardation).
Worked example
Spot $100, r = 5%, q = 2%, T = 1 year. F = 100 * e^((0.05 - 0.02) * 1) = 100 * e^0.03 = 100 * 1.030455 = $103.05. The basis is 103.05 - 100 = $3.05. The asset is in contango because the financing cost (5%) exceeds the income it pays (2%).
Forward price: frequently asked questions
What is a forward price?
A forward price is the agreed price today for delivery of an asset at a future date. Under no-arbitrage, it equals the spot price grown at the cost of carry: the risk-free rate, less any income (such as dividends) the asset pays while held. With continuous compounding the formula is F = S * e^((r - q) * T).
What is the carry yield q?
For a dividend-paying stock or index, q is the continuous dividend yield. For a currency, q is the foreign risk-free rate. For a commodity, q can be a convenience yield net of storage cost. A positive q lowers the forward price relative to the spot; a negative net carry raises it.
How does a forward differ from a futures price?
Forwards are private, over-the-counter agreements settled at maturity, while futures are standardised, exchange-traded and marked to market daily. When interest rates are deterministic, the no-arbitrage forward and futures prices are equal, which is why both use the cost-of-carry relationship.
Sources and method
- U.S. Commodity Futures Trading Commission, education on futures and derivatives: CFTC: Learn and Protect.
- Method: the standard no-arbitrage cost-of-carry relationship F = S * e^((r - q) * T); a public derivatives result. No proprietary data is used.
Reviewed by the CalculatorHub team, edited by James Graham, 19 June 2026. See our methodology.