Forward quotations are a means of expressing the forward rate that is to be paid for a particular currency at a later date. Forward rates are expressed for a fixed period of 30, 90, or 180 days from the date of the contract. What the contract does is lock in a particular rate to buy a currency after the set number of days are passed. This can allow a company to hedge against currency exchange risk by allowing them to set a particular price for a currency. Instead of waiting the 30, 90, or 180 days to see what the exchange rate will then be, the company can purchase the rate of the exchange now, which can prevent the company from exchanging currency at a much higher price. This can also backfire, because if the currency they want to buy in the future depreciates, they are going to be paying a much higher price for it. Forward quotations are used to reflect those contracts that are made for future exchanges of currency. Forward quotations are usually expressed in one of two ways: either as an outright price of what the exchange rate will be for the forward rate, or in terms of the spread on the spot rate. The “spot rate” is the rate of the exchange for that currency at that exact particular time. Because the forward rate is not the same as the spot rate, the forward quote of the price might be at a forward discount or a forward premium. It is at a forward premium when the stated forward rate is higher than the spot rate, and it is at a forward discount if the stated forward rate is lower than the spot rate. The differential that exists between the forward and the spot rate is known as the swap rate.