An important element of forward contracts is that no money changes hands between parties when the contract is initiated. Unlike in the purchase and sale of an asset, there is no value exchanged at the start. The buyer does not pay the seller some money and obtain something. In fact, forward contracts have zero value at the start. They are neither assets nor liabilities. As you will learn in later readings, their values will deviate from zero later as prices move. Forward contracts will almost always have non-zero values at expiration.
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