Not Regulated. High Counterparty Risk
Government regulated market. Low Counterparty Risk.
Settlement only on maturity date in case of profits from cancelled forward contracts. Loss to be paid immediately.
Settlement only in INR based on mark-to-market T+1 day basis
No guranantee of settlement until the date of maturity only the forward price, based on the spot price of the underlying asset is paid.
Both parties must deposit an initial guarantee (margin). The value of the operation is marked to market rates with daily settlement of profits and losses.
Mandatory as per RBI regulation
Not required
Compensating bank balances or credit lines needed (such as FD, bank guarantee, etc.) as FD, bank guarantee, etc.) depending on the credit profile
of client
Margin is as low as 3% to 5% of total exposure. Tracked on real-time basis using Value-at-Risk (VaR) measures and SPAN™
Rarely Transferable
Easily Liquidated by offsetting
High bid-ask spread due to high transaction cost owing to bank charges
Transparent online trading platform ensures uniform real-time price access for all market participants
Interbank Market Accessed through phone
Online electronic trading through leased line, VSAT, internet (investor client)
- Banks
- Brokers
- Central Banks
- Multinational Companies
- Banks
- Brokers
- Multinational Companies
- Hedge Funds
- Individuals
- CTAs
A forward contract is an agreement between two parties to buy or sell an asset (which can be of any kind) at a pre-agreed future point in time.
A futures contract is a standardized contract, traded on a futures exchange, to buy or sell a certain underlying instrument at a certain date in the future, at a specified price.
Depending on the transaction and the requirements of the contracting parties for at least USD 1 million.
Standard futures contract lot size as low as USD 1,000