{"id":32097,"date":"2015-05-29T19:36:43","date_gmt":"2015-05-29T19:36:43","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=32097"},"modified":"2024-04-03T13:17:32","modified_gmt":"2024-04-03T07:47:32","slug":"forward-and-future-contracts","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/","title":{"rendered":"FORWARD AND FUTURE CONTRACTS"},"content":{"rendered":"

Forward\u00a0contract\u00a0is\u00a0an\u00a0agreement\u00a0between\u00a0two\u00a0parties\u00a0under\u00a0which\u00a0one\u00a0party\u00a0agrees\u00a0to\u00a0buy\u00a0from\u00a0the\u00a0other\u00a0party\u00a0a \u00a0specified\u00a0amount\u00a0of\u00a0an\u00a0asset\u00a0on\u00a0a\u00a0specified\u00a0date\u00a0at\u00a0a\u00a0specified\u00a0price.The\u00a0investor\u00a0agreeing\u00a0to\u00a0sell\u00a0the\u00a0product\u00a0holds\u00a0a\u00a0short\u00a0forward\u00a0contract\u00a0and\u00a0the\u00a0buyers\u00a0holds\u00a0a\u00a0long\u00a0forward\u00a0position.<\/p>\n

A\u00a0future\u00a0contract\u00a0is\u00a0a\u00a0standardized\u00a0tradable\u00a0contract\u00a0between\u00a0two\u00a0parties\u00a0to\u00a0trade\u00a0a\u00a0specified\u00a0asset\u00a0on\u00a0a\u00a0specified\u00a0date\u00a0at\u00a0a\u00a0specified\u00a0time.All\u00a0the\u00a0details\u00a0are\u00a0pre\u00a0determined.<\/p>\n

There\u00a0is\u00a0a\u00a0thin\u00a0line\u00a0of\u00a0difference\u00a0between\u00a0the\u00a0two,the\u00a0following\u00a0example\u00a0will\u00a0explain\u00a0the\u00a0difference\u00a0between\u00a0the\u00a0two.\u00a0You\u00a0wanted\u00a0to\u00a0buy\u00a0a\u00a0cow\u00a0for\u00a0your\u00a0farm.\u00a0You\u00a0can\u00a0either\u00a0buy\u00a0a\u00a0cow\u00a0of\u00a0any\u00a0color\u00a0and\u00a0breed\u00a0or\u00a0u\u00a0may\u00a0wish\u00a0to\u00a0buy\u00a0a\u00a0cow\u00a0of\u00a0a\u00a0particular\u00a0size\u00a0and\u00a0breed.\u00a0Futures\u00a0are\u00a0like\u00a0buying\u00a0cows\u00a0of\u00a0any\u00a0color\u00a0or\u00a0breed.\u00a0They\u00a0are\u00a0standardized.\u00a0Forwards\u00a0are\u00a0like\u00a0buying\u00a0a\u00a0cow\u00a0of\u00a0a\u00a0particular\u00a0breed\u00a0with\u00a0no\u00a0standardization.<\/p>\n

The\u00a0main\u00a0differences\u00a0between\u00a0them\u00a0are;<\/p>\n

    \n
  1. Forwards\u00a0are\u00a0typically\u00a0traded\u00a0over\u00a0the\u00a0counter\u00a0whereas\u00a0futures\u00a0are\u00a0cleared\u00a0through\u00a0clearing\u00a0houses.<\/li>\n
  2. Forwards\u00a0are\u00a0generally\u00a0private\u00a0agreements\u00a0therefore\u00a0there\u00a0is\u00a0high\u00a0risk\u00a0of\u00a0default\u00a0on\u00a0the\u00a0side\u00a0of\u00a0parties\u00a0whereas,\u00a0in\u00a0futures\u00a0clearing\u00a0house\u00a0is\u00a0involved\u00a0so\u00a0there\u00a0is\u00a0a\u00a0dergree\u00a0of\u00a0guarantee\u00a0of\u00a0agreement\u00a0involved.<\/li>\n
  3. Forwards\u00a0are\u00a0settled\u00a0at\u00a0the\u00a0end\u00a0of\u00a0the\u00a0agreement\u00a0on\u00a0the\u00a0specified\u00a0date\u00a0whereas\u00a0futures\u00a0are\u00a0marketed\u00a0on\u00a0daily\u00a0market\u00a0basis,i.e,\u00a0daily\u00a0changes\u00a0are\u00a0settled\u00a0day\u00a0by\u00a0day\u00a0until\u00a0the\u00a0end\u00a0of\u00a0the\u00a0contract.<\/li>\n
  4. Forwards\u00a0are\u00a0usually\u00a0used\u00a0by\u00a0hedgers\u00a0who\u00a0wants\u00a0to\u00a0eliminate\u00a0the\u00a0volatility\u00a0of\u00a0the\u00a0price\u00a0and\u00a0delivery\u00a0agreements\u00a0of\u00a0the\u00a0asset.\u00a0On\u00a0the\u00a0other\u00a0hand,forwards\u00a0are\u00a0used\u00a0but s\u00a0who\u00a0bets\u00a0on\u00a0the\u00a0direction\u00a0in\u00a0which\u00a0the\u00a0price\u00a0of\u00a0the\u00a0asset\u00a0will\u00a0move.<\/li>\n
  5. Forwards\u00a0are\u00a0generally\u00a0customized\u00a0to\u00a0consumer’s\u00a0needs\u00a0and\u00a0involve\u00a0no\u00a0payments\u00a0made\u00a0in\u00a0advance.\u00a0On\u00a0the\u00a0other\u00a0hand\u00a0futures\u00a0are\u00a0standardized\u00a0and\u00a0involve\u00a0payment\u00a0of\u00a0initial\u00a0margins\u00a0to\u00a0avoid\u00a0speculations\u00a0in\u00a0the\u00a0contract.<\/li>\n<\/ol>\n

    Click here for government certification in Accounting, Banking & Finance<\/a><\/p>\n

     <\/p>\n","protected":false},"excerpt":{"rendered":"

    Forward\u00a0contract\u00a0is\u00a0an\u00a0agreement\u00a0between\u00a0two\u00a0parties\u00a0under\u00a0which\u00a0one\u00a0party\u00a0agrees\u00a0to\u00a0buy\u00a0from\u00a0the\u00a0other\u00a0party\u00a0a \u00a0specified\u00a0amount\u00a0of\u00a0an\u00a0asset\u00a0on\u00a0a\u00a0specified\u00a0date\u00a0at\u00a0a\u00a0specified\u00a0price.The\u00a0investor\u00a0agreeing\u00a0to\u00a0sell\u00a0the\u00a0product\u00a0holds\u00a0a\u00a0short\u00a0forward\u00a0contract\u00a0and\u00a0the\u00a0buyers\u00a0holds\u00a0a\u00a0long\u00a0forward\u00a0position. A\u00a0future\u00a0contract\u00a0is\u00a0a\u00a0standardized\u00a0tradable\u00a0contract\u00a0between\u00a0two\u00a0parties\u00a0to\u00a0trade\u00a0a\u00a0specified\u00a0asset\u00a0on\u00a0a\u00a0specified\u00a0date\u00a0at\u00a0a\u00a0specified\u00a0time.All\u00a0the\u00a0details\u00a0are\u00a0pre\u00a0determined. There\u00a0is\u00a0a\u00a0thin\u00a0line\u00a0of\u00a0difference\u00a0between\u00a0the\u00a0two,the\u00a0following\u00a0example\u00a0will\u00a0explain\u00a0the\u00a0difference\u00a0between\u00a0the\u00a0two.\u00a0You\u00a0wanted\u00a0to\u00a0buy\u00a0a\u00a0cow\u00a0for\u00a0your\u00a0farm.\u00a0You\u00a0can\u00a0either\u00a0buy\u00a0a\u00a0cow\u00a0of\u00a0any\u00a0color\u00a0and\u00a0breed\u00a0or\u00a0u\u00a0may\u00a0wish\u00a0to\u00a0buy\u00a0a\u00a0cow\u00a0of\u00a0a\u00a0particular\u00a0size\u00a0and\u00a0breed.\u00a0Futures\u00a0are\u00a0like\u00a0buying\u00a0cows\u00a0of\u00a0any\u00a0color\u00a0or\u00a0breed.\u00a0They\u00a0are\u00a0standardized.\u00a0Forwards\u00a0are\u00a0like\u00a0buying\u00a0a\u00a0cow\u00a0of\u00a0a\u00a0particular\u00a0breed\u00a0with\u00a0no\u00a0standardization. The\u00a0main\u00a0differences\u00a0between\u00a0them\u00a0are; Forwards\u00a0are\u00a0typically\u00a0traded\u00a0over\u00a0the\u00a0counter\u00a0whereas\u00a0futures\u00a0are\u00a0cleared\u00a0through\u00a0clearing\u00a0houses. Forwards\u00a0are\u00a0generally\u00a0private\u00a0agreements\u00a0therefore\u00a0there\u00a0is\u00a0high\u00a0risk\u00a0of\u00a0default\u00a0on\u00a0the\u00a0side\u00a0of\u00a0parties\u00a0whereas,\u00a0in\u00a0futures\u00a0clearing\u00a0house\u00a0is\u00a0involved\u00a0so\u00a0there\u00a0is\u00a0a\u00a0dergree\u00a0of\u00a0guarantee\u00a0of\u00a0agreement\u00a0involved. Forwards\u00a0are\u00a0settled\u00a0at\u00a0the\u00a0end\u00a0of\u00a0the\u00a0agreement\u00a0on\u00a0the\u00a0specified\u00a0date\u00a0whereas\u00a0futures\u00a0are\u00a0marketed\u00a0on\u00a0daily\u00a0market\u00a0basis,i.e,\u00a0daily\u00a0changes\u00a0are\u00a0settled\u00a0day\u00a0by\u00a0day\u00a0until\u00a0the\u00a0end\u00a0of\u00a0the\u00a0contract. Forwards\u00a0are\u00a0usually\u00a0used\u00a0by\u00a0hedgers\u00a0who\u00a0wants\u00a0to\u00a0eliminate\u00a0the\u00a0volatility\u00a0of\u00a0the\u00a0price\u00a0and\u00a0delivery\u00a0agreements\u00a0of\u00a0the\u00a0asset.\u00a0On\u00a0the\u00a0other\u00a0hand,forwards\u00a0are\u00a0used\u00a0but s\u00a0who\u00a0bets\u00a0on\u00a0the\u00a0direction\u00a0in\u00a0which\u00a0the\u00a0price\u00a0of\u00a0the\u00a0asset\u00a0will\u00a0move. Forwards\u00a0are\u00a0generally\u00a0customized\u00a0to\u00a0consumer’s\u00a0needs\u00a0and\u00a0involve\u00a0no\u00a0payments\u00a0made\u00a0in\u00a0advance.\u00a0On\u00a0the\u00a0other\u00a0hand\u00a0futures\u00a0are\u00a0standardized\u00a0and\u00a0involve\u00a0payment\u00a0of\u00a0initial\u00a0margins\u00a0to\u00a0avoid\u00a0speculations\u00a0in\u00a0the\u00a0contract. Click here for government certification in Accounting, Banking & Finance  <\/p>\n","protected":false},"author":1272,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[4061,4063,4062],"class_list":["post-32097","post","type-post","status-publish","format-standard","hentry","category-accounting-banking-and-finance","tag-forward-and-future-contracts","tag-hedgers","tag-speculators"],"acf":[],"yoast_head":"\nFORWARD AND FUTURE CONTRACTS - Vskills Blog<\/title>\n<meta name=\"description\" content=\"FORWARD AND FUTURE CONTRACTS and their users. Apply for a Vskills certification in Accounting, Banking and finance now. Hurry up!\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"FORWARD AND FUTURE CONTRACTS - Vskills Blog\" \/>\n<meta property=\"og:description\" content=\"FORWARD AND FUTURE CONTRACTS and their users. Apply for a Vskills certification in Accounting, Banking and finance now. Hurry up!\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/\" \/>\n<meta property=\"og:site_name\" content=\"Vskills Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/vskills.in\" \/>\n<meta property=\"article:published_time\" content=\"2015-05-29T19:36:43+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-04-03T07:47:32+00:00\" \/>\n<meta name=\"author\" content=\"Vinny Satija\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Vinny Satija\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/\",\"name\":\"FORWARD AND FUTURE CONTRACTS - Vskills Blog\",\"isPartOf\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\"},\"datePublished\":\"2015-05-29T19:36:43+00:00\",\"dateModified\":\"2024-04-03T07:47:32+00:00\",\"author\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/ecc15bba652d64fe2f7b5dc415aad1f5\"},\"description\":\"FORWARD AND FUTURE CONTRACTS and their users. Apply for a Vskills certification in Accounting, Banking and finance now. Hurry up!\",\"breadcrumb\":{\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.vskills.in\/certification\/blog\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"FORWARD AND FUTURE CONTRACTS\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#website\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/\",\"name\":\"Vskills Blog\",\"description\":\"Vskills - A Initiative in Assessment to Enhance Employability\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.vskills.in\/certification\/blog\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/ecc15bba652d64fe2f7b5dc415aad1f5\",\"name\":\"Vinny Satija\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/6ed80246b27778aa2cc7ca1a3d71dc5e7e0a44af0cba9e740be6edea3ce4d5f2?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/6ed80246b27778aa2cc7ca1a3d71dc5e7e0a44af0cba9e740be6edea3ce4d5f2?s=96&d=mm&r=g\",\"caption\":\"Vinny Satija\"},\"description\":\"i am a commerce student from Delhi university and an aspiring actuary.\",\"url\":\"https:\/\/www.vskills.in\/certification\/blog\/author\/vinny-satija\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"FORWARD AND FUTURE CONTRACTS - Vskills Blog","description":"FORWARD AND FUTURE CONTRACTS and their users. Apply for a Vskills certification in Accounting, Banking and finance now. Hurry up!","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/","og_locale":"en_US","og_type":"article","og_title":"FORWARD AND FUTURE CONTRACTS - Vskills Blog","og_description":"FORWARD AND FUTURE CONTRACTS and their users. Apply for a Vskills certification in Accounting, Banking and finance now. Hurry up!","og_url":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/","og_site_name":"Vskills Blog","article_publisher":"https:\/\/www.facebook.com\/vskills.in","article_published_time":"2015-05-29T19:36:43+00:00","article_modified_time":"2024-04-03T07:47:32+00:00","author":"Vinny Satija","twitter_misc":{"Written by":"Vinny Satija","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/","url":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/","name":"FORWARD AND FUTURE CONTRACTS - Vskills Blog","isPartOf":{"@id":"https:\/\/www.vskills.in\/certification\/blog\/#website"},"datePublished":"2015-05-29T19:36:43+00:00","dateModified":"2024-04-03T07:47:32+00:00","author":{"@id":"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/ecc15bba652d64fe2f7b5dc415aad1f5"},"description":"FORWARD AND FUTURE CONTRACTS and their users. Apply for a Vskills certification in Accounting, Banking and finance now. Hurry up!","breadcrumb":{"@id":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.vskills.in\/certification\/blog\/forward-and-future-contracts\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.vskills.in\/certification\/blog\/"},{"@type":"ListItem","position":2,"name":"FORWARD AND FUTURE CONTRACTS"}]},{"@type":"WebSite","@id":"https:\/\/www.vskills.in\/certification\/blog\/#website","url":"https:\/\/www.vskills.in\/certification\/blog\/","name":"Vskills Blog","description":"Vskills - A Initiative in Assessment to Enhance Employability","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.vskills.in\/certification\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/ecc15bba652d64fe2f7b5dc415aad1f5","name":"Vinny Satija","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.vskills.in\/certification\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/6ed80246b27778aa2cc7ca1a3d71dc5e7e0a44af0cba9e740be6edea3ce4d5f2?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/6ed80246b27778aa2cc7ca1a3d71dc5e7e0a44af0cba9e740be6edea3ce4d5f2?s=96&d=mm&r=g","caption":"Vinny Satija"},"description":"i am a commerce student from Delhi university and an aspiring actuary.","url":"https:\/\/www.vskills.in\/certification\/blog\/author\/vinny-satija\/"}]}},"_links":{"self":[{"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/posts\/32097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/users\/1272"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/comments?post=32097"}],"version-history":[{"count":7,"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/posts\/32097\/revisions"}],"predecessor-version":[{"id":72232,"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/posts\/32097\/revisions\/72232"}],"wp:attachment":[{"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/media?parent=32097"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/categories?post=32097"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vskills.in\/certification\/blog\/wp-json\/wp\/v2\/tags?post=32097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}