Yes you are right. There are lots of terms which are not properly explained. The most common are used to describe types of contracts. The two most popular terms are “Spot Contracts” and “Forward time Options”.

Spot Contracts are used for quick turn around orders – property deposits or solicitor fees. They are calculated using the exchange rate at the given time.

A Forward Time Option secures a rate of exchange for delivery of currency in the future. A small deposit is placed with a currency broker and the balance is settled when the currency is sent.  The exchange rate is fixed at the time of the deposit.