What Is the Difference between a ‘Future’ and a ‘Forward’ Contract?
Both are agreements to buy or sell an asset at a predetermined price on a future date. A futures contract is standardized, traded on an exchange, and typically settled daily through a clearinghouse (marked-to-market).
A forward contract is customized, traded over-the-counter (OTC), and settled at the contract's expiration date.
Glossar
Predetermined Price
Contract Parameter ⎊ A Predetermined Price, often referred to as the Strike Price in options terminology, is the fixed value at which the underlying cryptocurrency asset can be bought or sold if the option contract is exercised.
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.
Futures Contract
Leverage ⎊ Futures contracts in cryptocurrency represent agreements to buy or sell an underlying asset at a predetermined price on a future date, functioning as a derivative instrument that allows for amplified exposure without immediate asset ownership.