Forward market is also called normal market, that is, under normal circumstances, the futures price is higher than the actual price (or the contract price is lower than the forward month contract price), and the basis is negative.

The forward market is divided into two situations: one is that the futures price is higher than the spot price;

Second, the forward contract price is higher than the recent contract price.

Because the futures market will have more holding costs in the future, in theory, the futures price should be higher than the spot price, and the price of the forward contract is correspondingly higher than that of the recent contract. The forward market is an ideal environment for hedging transactions.