The difference between the higher forward and the lower spot price of a currency expressed as an annualized percentage.
A currency trades at a forward premium when its forward price is higher than its spot price.
A condition with a forward contract where the forward rate of exchange is less favourable than the spot price. Generally, in countries with lower interest rates, the forward price will be less favourable than spot and the foreign currency will sell at a premium.
The premium that has to be paid when a traded currency's forward price is greater than its spot price.