Benjamin M_ Cooper

ดูการแปล

How do forwards differ from futures in forex hedging?

Forwards are customized OTC contracts locking exchange rates for future settlement, widely used by corporations. Futures are standardized contracts traded on exchanges like CME. Institutions use forwards for flexibility, futures for transparency. Retail traders rarely access forwards but can trade mini futures. Benefits: both provide certainty and risk control. Risks: forwards carry counterparty risk, while futures require margin and may not match exposure precisely. For hedgers, forwards suit tailored needs, while futures provide liquidity and transparency. Both tools prove forex risk can be transferred, not eliminated.