Chapter 01 · Section 1.1

Trading Method



                  Forwards             Futures


Contract Terms     variable             standard
Delivery           expected             only 2-5%
Trading            via phone            ........  
Margins            ........             ........
Credit Risk        ........             ........
Liquidity          ........             ........
Cash Flow          ........             ........

Forward trading is usually done by phoning around to find an interested partner.

What about futures trading?

Which of the above describes best how futures trading is done in comparison to forwards. One important feature in the futures market is that you do not need to actively look for a partner. Your bid or offer is announced openly on the exchange floor or on the trading screen (of an automated exchange). EW