Differences between Forward Contracts and Futures Contracts:

1. Standardization:
   • Forward Contracts: These are non-standardized contracts that are customized based on the specific needs of the parties involved. They are traded over-the-counter (OTC).
   • Futures Contracts: These are standardized contracts with fixed terms, such as quantity, quality, and delivery date, that are traded on organized exchanges.
2. Trading Venue:
   • Forward Contracts: Forward contracts are traded privately between parties without a centralized marketplace.
   • Futures Contracts: Futures contracts are traded on organized exchanges with the involvement of a clearinghouse that guarantees the performance of the contract.