Question

What is the difference between a forward market and a futures market?

Answer 1

forward contract is a private agreement between two parties and futures are exchange traded. there is also a difference in the settlement of the as the futures are settled through exchanges whiles as forwards are otcs. besides there is a difference in the credit risk involving the two instruments while as there is a probability of a default by counter party in case of a forward contract, futures are relatively have lesser credit risk.