What Is a ‘Synthetic Forward Contract’ and How Can a Token Replicate It?

A synthetic forward contract is a position created by combining a long call option and a short put option with the same strike price and expiration date. A utility token can replicate a forward contract by granting the holder the right to purchase a future service at a set price (like a call) and obligating the company to sell the service (like a put).

This creates a guaranteed future exchange rate for the service, effectively locking in the price.