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Forward contract:


One party agrees to buy (counterparty sells) or sell (counterparty buys) a physical asset / security at a specific price on a specific future date. If asset's future price increases, buyer
(at the older, lower price) incurs gain & seller losses.

Futures contract:

Standardized, exchange-traded forward contract. Different from forwards. Futures trade in active secondary market, are regulated, backed by clearing house and require daily settlement of gains losses.

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