Financial futures refers to a binding standardized contract in which both parties buy and sell a financial instrument at an agreed time and price in the financial market. Futures contracts with financial instruments as the subject matter.
A financial forward contract refers to an agreement or contract reached by both parties to buy or sell a certain (or a basket of) financial assets at a pre-agreed price (such as interest rate, exchange rate, stock or bond price, etc.) on a specific date in the future. ), such as forward foreign exchange contracts, forward interest rate agreements, forward stock contracts, forward bond contracts, etc.
2. Different characteristics
As a kind of futures, financial futures has the general characteristics of futures, but compared with commodity futures, its contract subject matter is not physical goods, but traditional financial goods, such as securities, currency, interest rates and so on.
The characteristics of financial forward contracts are: non-standard, generally over-the-counter transactions, not easy to flow. Buyers and sellers are prone to breach of contract, and they cannot directly see the performance of the contract from the signing of the contract to the delivery of the house, which is risky. There is no cash flow before the contract expires. The contract must be delivered when it expires, and the position cannot be closed by reverse hedging.
3. Standardization and flexibility are different.
Both parties to a financial forward contract promise to buy and provide a financial instrument at a certain time in the future, and sign a contract in advance to determine the price for future delivery.
Although the actual delivery ratio of financial futures in futures trading is very small, once delivery is needed, the delivery of ordinary commodity futures is more complicated. In addition to strict regulations on delivery time, delivery place and delivery method, delivery grades should also be strictly divided.
Baidu encyclopedia-financial futures
Baidu Encyclopedia-Financial Forward Contract