What does the buyer hold in a forward contract?

In a forward contract, the buyer holds a long position. This means that the buyer has agreed to purchase the underlying asset at a specified future date for a predetermined price. The long position indicates an expectation that the price of the asset will rise, allowing the buyer to profit from the contract when the agreement is fulfilled.

By entering into a forward contract, the buyer commits to receiving the asset, while the seller commits to delivering it at the later date. The long position is important for managing risk and speculation; the buyer aims to benefit from favorable price movements in the underlying asset.

The other options do not accurately describe the buyer's position in a forward contract. For instance, a short position would imply that the party is obligated to sell the asset rather than buy it, which does not apply to the buyer's role in this arrangement. Similarly, margin and restricted positions pertain to different financial contexts and do not directly relate to the fundamental nature of a forward contract's buyer.