The payment of a premium when the contract is entered represent a difference between an option contract and a forward contract.

Name: The payment of a premium when the contract is entered represent a difference between an option contract and a forward contract.
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In an option contract, the buyer pays a premium upfront for the right, but not the obligation, to execute the contract at a future date, whereas in a forward contract, there are no upfront payments; obligations are settled at contract maturity.

The Payment of a Premium When the Contract Is Entered