What are the advantages and disadvantages of forward contract?

Advantages and Disadvantages of Forwards Forward contract is a non-standardized contract between two parties to buy or sell an asset at a specified time at an agreed price. The advantages of forward contracts are as follows: 1) They can be matched against the time period of exposure as well as for the cash size of the exposure. 2) Forwards are tailor made and can be written for any amount and ...

How long is standard futures contract?

Well it actually depends. However, usually the contracts are for a month. For index futures, since they are traded in larger volumes, they also have futures with weekly expiries. This is in reference to the Indian markets. Now, coming to commodities, there are contracts with expiries that span over years as well present here.

What are fixed and option forward contracts?

Fixed and option forward: A fixed contract is one where the parties agree on the amount and the rate at which the deal will be put through, but the delivery will be made on a predetermined future date. Thus, if on 6th March a customer enters into a three months forward contract with his bank to sell £ 10,000, it means the customer would be ...