What Is the Difference between a Forward Contract and a Futures Contract?
A forward contract is a private agreement between two parties to buy or sell an asset at a specified price on a future date. It is an OTC derivative and its terms are customizable.
A futures contract is a standardized agreement to buy or sell an asset at a specified price on a future date, and it is traded on an exchange. Futures contracts are marked-to-market daily, meaning that gains and losses are settled each day.
Glossar
Futures Contracts
Mechanism ⎊ Futures contracts, within cryptocurrency and broader financial derivatives, represent standardized agreements obligating parties to transact an asset at a predetermined price on a specified future date; these instruments facilitate price discovery and risk transfer, extending beyond traditional commodities to encompass digital assets and complex financial indices.
Forward Contract
Instrument ⎊ A binding agreement to buy or sell a specified quantity of a cryptocurrency asset at a predetermined price on a future date, established off-chain but often settled via on-chain mechanisms or collateral management.