What is the difference between a future and a forward?
| Forward | Future | |
| Definition | A contract between two parties to buy or sell an asset at a future date for a price that is decided on the date of the contract. | A contract between two parties to buy or sell an asset. It is made through the stock exchange rather than directly between the two parties. |
| Contract type | Tailor-made contract | Standardized contract |
| Traded on | Over the counter | Stock exchange |
| Settlement | On maturity date | Daily |
| Risk | High | Low |
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