Difference between forwards and futures

timer Asked: Jul 20th, 2013
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Question Description

Whats the exact difference between futures and forward contracts ?

Tutor Answer

School: New York University

futures are marketable and can be bought or sold any time till the settlement date so terms and conditions are standard.Third party is involved naming clearing house for making transaction more secure.
on the other hand forwards are agreement between two parties so term and conditions are tailor made and not rigid both depend on mutual understanding of parties. normally, they are settled at settlement date.

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Thanks, good work

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