With the arrival of the delivery deadline, various factors affecting the futures contract price will gradually become clear and fixed, market participants will gradually accept the reality, and the party making money or losing money will gradually withdraw from the market and enter a new battlefield. At this time, futures contracts are short-term contracts.

Forward contract refers to a contract in which both parties agree to buy and sell a certain amount of certain financial assets at a certain price at a certain time in the future. The contract stipulates the subject matter of the transaction, the validity period and the execution price at the time of delivery. It is a hedging tool.

2. Different characteristics

Judging from the transaction characteristics, the recent contract represents the level of spot price because it is close to delivery, and the price fluctuation is often small and the direction is relatively fixed. Even if there is a big fluctuation, it will eventually develop in the original direction. Another main reason why the recent contract price trend is "fixed" is that after fierce competition, both sides have won and lost, and it is difficult to repeat it.

A forward contract is a cash transaction in which a buyer and a seller reach an agreement to deliver a certain quality and quantity of goods in a certain period in the future. The price can be determined in advance or at the time of delivery. Forward contracts are over-the-counter transactions, and both parties have risks.

3. Different risks

The forward contract price can be determined in advance or at the time of delivery. Forward contracts are over-the-counter transactions, and both parties have risks.

Compared with recent contracts, forward contracts have a longer trading cycle and a longer time span, which contains many uncertainties. In addition, the trading volume and positions of forward contracts are not as large as those of recent contracts, and the liquidity is relatively poor, so the price fluctuation of forward contracts is more intense and frequent than that of recent contracts.

Baidu Encyclopedia-Forward Contract

Baidu Encyclopedia-Recent Contract