What is the difference between the futures contracts and forward contracts ?
Some of the basic differences between the futures and forward contracts are as follows: • While futures contracts are traded on the exchange, forwards contracts are traded over-the-counter market. • Incase of futures contracts the exchange specifies the standardized features of the contract, while no pre determined standards are there in the forward contracts. • Exchange provides the mechanism that gives the two parties a guarantee that the contract will be honored whereas there is no surety/guarantee of the trade settlement in case of forward contract.
