Table 1 Main Differences between Futures Contract and Forward Contract

Type of contract

Futures contract

Forward Contracts

Standard

Drawn up by the exchange

Negotiated by both sides

Content

Standardized contract

Negotiated by both sides

Maturity date

Drawn up by the exchange

Negotiated by both sides

Transaction method

Drawn up by the exchange

Negotiated by both sides

Exchange place

Centralized market ?the exchange

Over-the-counter market - banks are bought together by Intermediates

Ending method

Most are par in the exchange

Most are transaction of typical goods, assets

Calculation of profit and loss

Clearing on every transaction days

Clearing on maturity days

Supervision method

Supervised by laws

Self-control