The exchange rate used in foreign exchange spot trading is the spot exchange rate, that is, the exchange rate used by both parties for delivery within two business days after the transaction, while the exchange rate used in foreign exchange forward trading is the forward exchange rate, that is, the exchange rate agreed by both parties in advance for foreign exchange delivery on a future date. The forward exchange rate of a currency is higher than the spot exchange rate, which is called premium, also called forward premium. On the contrary, the forward exchange rate of a currency is lower than the spot exchange rate, which is called discount, also called forward discount.