A long position in a forward contract whereby an investor agrees to buy the underlying asset on a specified future date for a preset price. The payoff from a long forward contract on one unit of the underlying is the spot price of the asset at maturity of the contract minus the delivery price, or in equation form:

Payoff = S_T – K

The holder of this contract is obligated to purchase the underlying asset, worth the spot price S_T, for the delivery price K. If the spot price exceeds the delivery price, the contract’s payoff will be positive (gain), and vice versa.