Why Is MTM Less Common in Traditional Forward Contracts?

Traditional forward contracts are private, customized agreements between two parties. They are not traded on an exchange, and there is no central clearing house to manage risk.

The entire profit or loss is typically settled in a single payment on the contract's expiration date. Introducing daily MTM would require complex, ongoing coordination between the two private counterparties.

The lack of standardization makes MTM impractical for forwards.