Forward contracts and futures contracts are very similar and easy to be confused. Because these two contracts are contract transactions, both parties agree to buy or sell a certain amount of goods at an agreed price at a certain date in the future. The difference between them is that:

1, trading places is different. Futures contracts are traded on the exchange, which is open, while forward contracts are traded outside the exchange.

2. The normative nature of contracts is different. Futures contracts are standardized contracts, and the variety, specifications, quality, delivery place and settlement method of the contracts are uniformly stipulated except the price. All matters of a forward contract must be determined by both parties through negotiation, which is a complicated but adaptable process.

3. Different transaction risks. Futures contracts are settled through a special settlement company, which is a third party independent of buyers and sellers. Investors are not responsible for each other, there is no credit risk, only the risk of price changes. The forward contract is delivered only when it expires, and the payment has long been unchanged, so there is no price risk. Its risk comes from whether the other party really performs the contract at that time and whether it can pay after physical delivery, that is, there is credit risk.

4. The deposit system is different. Both parties to the futures contract pay the deposit according to the specified proportion, while the forward contract is not standardized and there is credit risk. Whether or not to pay the deposit or deposit and how much to pay it are also agreed by both parties, and there is no uniformity.

5. Different responsibilities. Futures contracts have hedging mechanism, large performance space, extremely low physical delivery ratio, and the transaction price is limited by the minimum price change unit and daily trading amplitude. If the forward contract is to be cancelled midway, both parties must agree. No unilateral will can terminate the contract, and the proportion of physical delivery is extremely high.