Little of what we say about futures contracts applies equally to forward contracts.

Question

Quizplus · Accepted Answer

Futures and forward contracts are similar in many ways, as both are types of derivative contracts used to buy or sell an asset at a future date for a price agreed upon today. However, futures contracts are standardized and traded on exchanges, while forward contracts are private agreements between parties and can be customized. This means that while there are similarities, not everything said about futures contracts applies equally to forward contracts due to differences in standardization, regulation, and trading venues.

Little of What We Say About Futures Contracts Applies Equally