2. Different functions: one of the main functions of futures trading is to find the price, and the contract in forward trading lacks liquidity, so it does not have the function of finding the price;
3. Different performance methods: There are two performance methods for futures trading: physical delivery and hedging liquidation, and the final performance method for forward trading is physical delivery;
4. Different credit risks: futures trading adopts the daily debt-free settlement system, and the credit risk is very small. It takes a long time from forward trading to final physical delivery, during which various changes will take place in the market, and any behavior that is not conducive to performance may appear, with great credit risk;
5. Different margin systems: futures trading has a specific margin system, and whether or not to charge or how much margin to charge for forward trading is privately agreed by both parties.
Extended data:
The main characteristics of futures trading:
1, small and wide. Futures trading only needs to pay 5- 10% performance bond, and it can complete several times or even dozens of times of contract transactions. Due to the leverage effect of the futures trading margin system, it has the characteristics of "small and wide", and traders can use a small amount of funds to conduct large transactions, saving a lot of working capital.
2. Two-way transaction. In the futures market, you can buy first and then sell, or you can sell first and then buy, so the investment method is flexible.
3. Don't worry about performance. All futures transactions are settled through the futures exchange, which becomes the counterparty of any buyer or seller and provides guarantee for each transaction. So traders don't have to worry about the performance of the transaction.
4. Market transparency. Trading information is completely open, and trading is conducted by means of open bidding, so that traders can compete openly under equal conditions.
5. Tight organization and high efficiency. Futures trading is a standardized transaction with fixed trading procedures and rules, which are linked one by one and operate efficiently. A transaction can usually be completed in a few seconds.
Baidu encyclopedia-futures trading
Baidu Encyclopedia-Forward Contract