What is a difference between a forward contract and a future contract?
A)The settlement price of a forward contract is fixed over the life of the contract but in a futures contract is marked to market daily.
B)Forward contracts are normally arranged through an organised exchange, while most futures contracts are OTC contracts.
C)Both are essentially the same, except for the fact that the terms of a forward contract is set by the exchange, subject to the approval of the SFE.
D)Delivery of the underlying asset almost always occurs on a futures contract but almost never occurs on a forward contract.

Question

Quizplus · Accepted Answer

The main difference between a forward contract and a futures contract is in how the settlement price is determined. In a forward contract, the price is fixed at the time of the contract's creation and remains unchanged throughout the life of the contract. In a futures contract, the settlement price is marked to market daily, meaning that it is adjusted for the current market price of the underlying asset.

What Is a Difference Between a Forward Contract and a Future