Differences between forward contract and futures contract?

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Differences between forward contract and futures contract?..

Answer / vikas

Futures contracts are organised/standardised
forward contracts are non-standardised

futures contracts have daily MarkToMargin settlement
forward contracts gets settled only at expiry

Futures lot size and expiry defined by exchange
forwards ,lot size and expiry are mutually agreed

Futures are less risky as there is no counterparty risk
forwards are having counterparty rick ,means the counterparty can default at the time of payment

Is This Answer Correct ?    9 Yes 2 No

Differences between forward contract and futures contract?..

Answer / yadaram sudha

Future Forward
1. Standardized contracts. 1. Customized/Negotiated
contracts
2. Parties+ Exchange 2. Two parties.
3. Traded in Exchange 3. Over the counter nature
4. More liquid 4. Illiquid.
5. Requirement of payment of margin 5. No margin.
6. Follow daily settlement 6. Settlement happens at
the end of the period mostly by delivery.

Is This Answer Correct ?    3 Yes 0 No

Differences between forward contract and futures contract?..

Answer / hunish singla

1) Forward contract are non-standardized as compared to future contract.
2) There remains a problem of liquidity in forward contract but in the case of future contract, no such issue exists.
3) Forward contract are not traded on the stock exchange but the future contract are traded on stock exchange even the lot size, quality, delivery time etc are perfectly described in future contract.
4) Default risk prevails in the forward market because the counter party can default at any time but there is no risk in future market.

Is This Answer Correct ?    2 Yes 0 No

Differences between forward contract and futures contract?..

Answer / swetha

no cleraing house formal aggrement.
existies cleraing house.leagel one.

Is This Answer Correct ?    2 Yes 1 No

Differences between forward contract and futures contract?..

Answer / akanksha saini

A futures contract, unlike the privately-traded forward
contract, is publicly traded. As with the forward, each
futures contract is for the purchase or sale of a loan,
currency or commodity with actual delivery scheduled to
occur at some time in the future. While the concept behind
both forwards and futures contracts is the same -- namely,
providing a way for buyers and sellers to lock in a price
today for transactions that will take place in the future --
the way in which they are implemented is, for the most part,
completely opposite.

While forward contracts are privately executed between two
parties who know each other (at least figuratively
speaking), futures contracts trade on the floor of a futures
exchange. And because they trade on the floor of an
exchange, the transactions are always handled by brokers who
are members of that exchange. No futures contracts are
executed by the parties themselves, thereby maintaining
anonymity throughout the process. For example when someone
buys pork bellies or U.S. T-bills via a futures contract,
they have no idea whom they are actually buying them from,
which brings up the subject of risk.

Is This Answer Correct ?    0 Yes 2 No

Differences between forward contract and futures contract?..

Answer / k,subbareddy

forward contract means nomore benefit on that forwarded
future contract means expect past and fast

Is This Answer Correct ?    1 Yes 7 No

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