Compared with spot trading, the characteristics of forward contract trading are mainly manifested in the following aspects.
(1) In the forward contract transaction, the buyer and the seller must sign the forward contract, but the spot transaction is not necessary.
(2) In forward contract transactions, the time between the delivery of the goods by the buyer and the seller or the conclusion of the transaction is usually long, and the difference of several months is common, sometimes even as long as one year or more. Spot trading is generally buying and selling, instant delivery or delivery, even if there is a certain time interval, it is relatively short.
(3) Forward contract transactions often go through formal consultations and negotiations, and both parties reach an agreement to sign the contract. Spot trading is random, convenient and flexible, and there is no strict trading procedure.
(4) Forward contract transactions are usually required to be carried out in designated places, and the transactions of both parties should be monitored by a third party, so that the credit transaction is in an open, fair and just state, thus effectively preventing misconduct and maintaining the market trading order; Spot trading is not subject to too many restrictions, so it is also prone to some illegal acts.
Although there are great differences between forward contract trading and spot trading, in essence, the subject matter of both transactions is physical goods, and the purpose of trading is to transfer the ownership of goods and realize the value of goods, so both are commodity transactions. The subject matter of futures trading is the certificate of commodity ownership-standardized futures contract. The purpose of trading is not to realize the delivery of goods, but to avoid risks or make profits through speculation. Its essence is a kind of securities transaction.