Similarly, the case of a short-term contract to sell the underlying asset is Payoff (short) = K – S, where S = spot price on the delivery date and K = delivery price or the forward price agreed under the forward contract Suppose that the spot price at the end of 6 months i.e. 30 June 2016 is 67.00 and the forward price to sell USD INR is at ` 66.7350. The profit would be calculated as follows: Payoff (short) = 66.7350 (Forward Price) - 67.00 = -0.2650 In this case the forward contract holder suffers a loss of 0.2650 per USD as he would have received more INR if he had sold in the spot market at 67.00 while in the forward contract for selling USD he received only 66.7350. Positive or negative payouts show the notional profit or loss generated by the contract holder. A profit by one party generates an equivalent loss for the other party since there is no cost to enter into a forward contract. Value of a forward