The gain attained or the loss incurred by the holder of a forward contract at delivery date. In general, the payoff from a long position in a forward contract (long forward contract) on one unit of its underlying asset or commodity is:

Payoff_long= S_T – K

where: S_T is the spot price of the underlying at maturity of the contract K is the delivery price agreed in the contract.

The holder of the long position is obligated to buy the underlying, trading at sport price S_T, for the delivery price K.

On the other hand, the payoff from a short position in a forward contract (short forward contract) on one unit of its underlying is:

Payoff_short= K – S_T

The holder of the short position is obligated to sell the underlying, trading at sport price S_T, for the delivery price K.