Question

What is the difference between a forward contract and a futures contract?

Answer 1

A forward contract is a private agreement between two parties to buy or sell an asset at a specified price in the future. A futures contract, however, is a standardized contract traded on an exchange, with the obligation to buy or sell the asset at a predetermined price and date.

Answer 2

The main difference between a forward contract and a futures contract is that a forward contract is a private agreement between two parties, while a futures contract is a standardized agreement that is traded on an exchange. Additionally, a forward contract is not marked to market, while a futures contract is marked to market daily.

Answer 3

A forward contract is an agreement between two parties to buy or sell an asset at a specific price on a specific date in the future. A futures contract, on the other hand, is a standardized agreement traded on an exchange that specifies the delivery of an asset at a future date at a predetermined price. Unlike a forward contract, a futures contract can be bought or sold by any market participant, and the contract is settled daily based on market prices.

Answer 4

A forward contract is a private agreement between two parties to buy or sell an asset at a predetermined price on a specified future date. In contrast, a futures contract is a standardized agreement traded on an exchange, where parties agree to buy or sell an asset at a predetermined price on a specified future date.