Chapter 01 · Section 1.1
Fowards versus Futures Table
Forwards Futures
Contract Terms variable standard
Delivery expected only 2-5%
Trading via phone centralised
Margins negotiated uniform
Credit Risk taken by clearing
counterparty house
Liquidity ........ ........
Cash Flow ........ ........
Liquidity...
a) The forward market is likely to be more liquid than the futures market.
b) The futures market is likely to be more liquid than the forward market.
A market is liquid when the participant is able to sell or buy at any time.