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Distinguish between forwards contract and futures contract

      

Distinguish between forwards contract and futures contract

  

Answers


Dana
Futures are traded in organized exchanges while forwards are over the counter agreements
Futures contracts are standardized while forwards contracts depend on the purchase to the contract
Once a futures contract has been bought or sold, it can be traded at any point till maturity while a forwards contract once bought or sold cannot be traded hence futures contracts are more liquid
In a futures contract, delivery is rare while for the forwards contract, delivery is a must
Forwards contracts do not require collateral but for futures contracts prices must be marked to the market daily

Dana05 answered the question on July 15, 2019 at 15:15


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