# What Is the Difference between a "Future" and a "Forward" Contract? ⎊ Path

**Published:** 2025-12-05
**Author:** Greeks.live
**Categories:** Path

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## 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, marked-to-market daily, and guaranteed by a clearing house, reducing counterparty risk.

A forward contract is customized, traded over-the-counter (OTC), and subject to counterparty risk. Futures are highly liquid; forwards are tailored to specific needs.

- [How Does the Institutional Use of Over-the-Counter (OTC) Options Differ from Exchange-Traded Options?](https://learn.greeks.live/path/how-does-the-institutional-use-of-over-the-counter-otc-options-differ-from-exchange-traded-options/)

- [Explain the Difference between a Forward Contract and a Futures Contract](https://learn.greeks.live/path/explain-the-difference-between-a-forward-contract-and-a-futures-contract/)

- [What Are the Primary Differences between Exchange-Traded Derivatives and Over-the-Counter (OTC) Derivatives?](https://learn.greeks.live/path/what-are-the-primary-differences-between-exchange-traded-derivatives-and-over-the-counter-otc-derivatives/)

- [What Is the Primary Difference between a Futures Contract and a Forward Contract?](https://learn.greeks.live/path/what-is-the-primary-difference-between-a-futures-contract-and-a-forward-contract/)

- [Differentiate between a Forward Contract and a Futures Contract](https://learn.greeks.live/path/differentiate-between-a-forward-contract-and-a-futures-contract/)

- [How Does a Futures Contract Differ from a Forward Contract in the Context of Cryptocurrency Trading?](https://learn.greeks.live/path/how-does-a-futures-contract-differ-from-a-forward-contract-in-the-context-of-cryptocurrency-trading/)

- [How Do Standardized Futures Contracts Differ from Tailored Forward Contracts?](https://learn.greeks.live/path/how-do-standardized-futures-contracts-differ-from-tailored-forward-contracts/)

- [What Is the Difference between a Futures Contract and a Forward Contract?](https://learn.greeks.live/path/what-is-the-difference-between-a-futures-contract-and-a-forward-contract/)

## Glossar

### [Forward Contract](https://learn.greeks.live/area/forward-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)

Structure ⎊ A forward contract, within cryptocurrency and financial derivatives, establishes a customized agreement for the future exchange of an asset at a predetermined price and specified date.

## Discover More

### [What Is the Key Difference between an Option on Spot Crypto and an Option on a Crypto Future?](https://learn.greeks.live/path/what-is-the-key-difference-between-an-option-on-spot-crypto-and-an-option-on-a-crypto-future/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Key Difference between an Option on Spot Crypto and an Option on a Crypto Future?](https://learn.greeks.live/wp-content/uploads/2025/10/Deconstructed-Mechanism-Illustrating-High-Frequency-Quant-Execution-Via-Automated-Smart-Contract-Interfacing.webp)

Spot option's underlying is the crypto; futures option's underlying is a crypto futures contract.

### [What Is the Primary Risk Associated with a Forward Contract?](https://learn.greeks.live/path/what-is-the-primary-risk-associated-with-a-forward-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Primary Risk Associated with a Forward Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Secured-Kinetic-Energy-Transfer-Mechanism-Governing-Decentralized-Exchange-Liquidity-Pool-Volatility-Index.webp)

Counterparty risk, as the contract is a private, customized agreement without a central clearing house guarantee.

### [What Is a SAFT (Simple Agreement for Future Tokens) and How Does It Affect Distribution?](https://learn.greeks.live/path/what-is-a-saft-simple-agreement-for-future-tokens-and-how-does-it-affect-distribution/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a SAFT (Simple Agreement for Future Tokens) and How Does It Affect Distribution?](https://learn.greeks.live/wp-content/uploads/2025/10/XRay-Visualization-of-Counter-Rotating-Rotor-Head-Mechanism-Simulating-Dynamic-Hedging-Strategies.webp)

SAFT is a pre-sale legal agreement for accredited investors, leading to concentrated early token distribution.

### [What Are the Advantages of Futures Contracts over Forward Contracts?](https://learn.greeks.live/path/what-are-the-advantages-of-futures-contracts-over-forward-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Are the Advantages of Futures Contracts over Forward Contracts?](https://learn.greeks.live/wp-content/uploads/2025/10/Geometric-Abstraction-Illustrating-Volatility-Skew-and-Implied-Term-Structure-in-Decentralized-Finance.webp)

Futures contracts are standardized, exchange-traded, and centrally cleared, making them more accessible and less risky than forward contracts.

### [Contrast Standardization with the Customization Found in Forward Contracts](https://learn.greeks.live/path/contrast-standardization-with-the-customization-found-in-forward-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![Contrast Standardization with the Customization Found in Forward Contracts](https://learn.greeks.live/wp-content/uploads/2025/10/Decoupled-Cryptographic-Asset-Custody-Mechanism-Exhibiting-Interconnected-Data-Conduit-Structures.webp)

Forwards are customized (flexible terms, OTC, higher risk); Futures are standardized (fixed terms, exchange-traded, lower risk).

### [How Does the IV Difference Relate to the Concept of "Forward Volatility"?](https://learn.greeks.live/path/how-does-the-iv-difference-relate-to-the-concept-of-forward-volatility/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Does the IV Difference Relate to the Concept of "Forward Volatility"?](https://learn.greeks.live/wp-content/uploads/2025/10/Precision-Instrument-Modeling-for-Decentralized-Finance-Volatility-Surface-Calibration-Analysis.webp)

The IV difference is linked to the market's implied forward price, reflecting expectations of future volatility and directional bias.

### [What Is a Futures Contract and How Does It Differ from a Forward Contract?](https://learn.greeks.live/path/what-is-a-futures-contract-and-how-does-it-differ-from-a-forward-contract/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is a Futures Contract and How Does It Differ from a Forward Contract?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Entanglement-Energy-Flow-Modeling-Decentralized-Finance-Derivative-Pricing-Mechanisms.webp)

Futures are standardized, exchange-traded, and margined, while forwards are customized, OTC, and privately settled.

### [What Is the Main Utility of a Forward Contract for a Corporation?](https://learn.greeks.live/path/what-is-the-main-utility-of-a-forward-contract-for-a-corporation/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![What Is the Main Utility of a Forward Contract for a Corporation?](https://learn.greeks.live/wp-content/uploads/2025/10/Quantum-Cryptographic-Sphere-Apex-Overlaying-Automated-Market-Maker-Structure-Indicating-Volatility-Skew.webp)

Hedging price risk by locking in a specific price for a future purchase or sale of an asset, allowing for stable budgeting.

### [How Are Futures Contracts Different from Forward Contracts?](https://learn.greeks.live/path/how-are-futures-contracts-different-from-forward-contracts/?utm_source=crypto.greeks.live&utm_medium=referral&utm_campaign=satellite)
![How Are Futures Contracts Different from Forward Contracts?](https://learn.greeks.live/wp-content/uploads/2025/10/Asymmetric-Bifurcation-of-Collateralized-Debt-Position-Instruments-Against-Black-Background.webp)

Futures are standardized and exchange-traded with low counterparty risk; forwards are customized OTC contracts with higher risk.

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