Question

Economics
What are the two differences between futures contracts and forward contracts?

Answer 1

A forward contract is an arrangement that is made over the counter and settles just once at the end of the contract. Both parties involved in the agreement negotiate the exact terms of the contract. It is privately negotiated wile futures contracts are standardized contracts that trade on stock exchanges. they are settled on a daily basis.

Answer 2

They are very similar , but they do differ in way that future contracts are highly standardized and forward contracts can be privately negotiated. Futures are traded on an exchange , where as forwards are traded over the counter.