In theory, the difference in spot and forward prices should be equal to the finance charges, plus any earnings due to the holder of the security, according to the cost of carry model.
For example, on a share the difference in price between the spot and forward is usually accounted for almost entirely by any dividends payable in the period minus the interest payable on the purchase price.
In contrast, a perishable or soft commodity does not allow this arbitrage – the cost of storage is effectively higher than the expected future price of the commodity.
In the foreign exchange market, spot is normally two banking days forward for the currency pair traded.
For example, a one-month foreign exchange forward settles one month after the spot date.
An alternate statement of this: the rate of effective annual growth that equates the present value with the future value.