 So it is in this section I will explain the specific differences between the forward contracts and the future contracts. So when we are talking about the forward contract, there are five major steps that we generally follow. The first step for a forward contract is that there should be at least two parties who agree to exchange some item in the future at a delivery price which is specified now. So the price, the value of the price, you will do now, but the delivery of the product or asset will be in the future and you will specify that date in your forward contract. And as I said earlier that your asset can be a commodity, it can be a financial instrument. It can be a foreign exchange, it can be anything, but it is a condition that the value of the price will be there and the delivery date will also be specified in the forward contract. Step number two says that the forward price is defined as the delivery price. The forward price, that is the future price that you have to pay or the other party has to pay, we call it the delivery price. And that should be the current market value of the contract to be zero. So we will discuss this further in a little while. Now another important thing which is a part of a forward contract is that when you are signing the contract, there is no need for any kind of payment at that time. The fourth important thing is that the face value of the contract is the quantity of the item specified in the contract multiplied by the forward price. So the face value of the contract is the quantity that you are taking, you have to multiply it with the forward price and the face value will be defined. And the fifth and last point is that the party who agrees to buy the specified item is said to take a long position. The party who is buying that particular asset, we say it is taking a long position. And the party who is selling it, we say it in the technical or in the financial economics, we say it is taking a short position and the buyer is taking a long position. Who is the buyer who will pay in the future and that particular thing will be delivered. So this is how we can understand the difference between taking a short position and taking a long position. Now, who benefits from a forward contract? So basically what you do in the forward contract is you manage the risk, you hedge yourself towards the fluctuations that may happen in the future. You don't know that, for example, you are defining a forward contract for wheat. And you are saying that after a month, you or me will deliver a specified quantity of wheat. Now, after a month, in the price of that wheat, whatever loss there will be, it cannot happen on this particular contract. So in this way, you are protecting yourself against the fluctuations in the price of any commodity or any financial instrument. So this is the advantage of going for a forward contract. That you may benefit from a short selling or a long position. If one of the spot price on the contract maturity date is higher than the forward price, then whoever is taking a long position will benefit. But if the spot price on the contract maturity date is lower than the forward price, then the person who takes a short position will benefit. So this is how you can buffer yourself. Now, when we move towards the concept of futures contract, now we have talked about the forward contract. What are you doing in the future contract on the contrary? Future contracts are the standardized contracts. So there is no concept of standardized in the forward contract. Anybody can go for any kind of commodity. But here, certain clauses will be given, certain regulatory authority requirements will have to be added. So your futures contract will be defined. So it is a standardized contract which is specifically traded on the exchange. So you have a specific exchange, you can't buy or sell it anywhere else other than trading there. Now, another important thing is that commodity contract size and where and when the delivery will take place. All these things will be part of that standardized contract. Now, to clarify this in a better way, I would appreciate if you can have a look at this table. On the left-hand side, some information has been given about the futures and information has been given about the forwards on the right side which explains the difference between these two or makes it easier for us to understand. For the futures, we saw that futures will always be traded in the exchange. So there is a stock exchange like this, there is a specific exchange, futures will be traded there. But the forwards are privately negotiated. Now, futures are standardized. They have an exchange-specified, they are exchange-specified contract unit. They have an expiration date, tick size and notional value. These forward conditions don't need to be fulfilled. They are customized as per the requirements of the buyer and the seller. The futures are actively traded and the forwards are non-transferable. This means that if you sign a forward contract, then you can't transfer it to someone else. But in futures, it's not like that. Futures are actively traded. This means that whenever you are getting a loss of interest, you can immediately send it to the exchange and buy it. So they are actively traded. Now, what is the difference between futures? There is no counterparty risk since payment is guaranteed by the exchange-clearing house. That's why you can't fulfill your contract by giving it to someone else or taking it away. Futures are not in the contract. But what can happen in the forward? There can be a credit default risk because the entire process is privately negotiated and it is fully dependent on the counterparty for the payment. If the other party doesn't give you the payment as it is required, it doesn't deliver the commodity. Then you have to open the court door so that everybody can help you here. Another important difference is that futures are purely regulated and the forwards are non-regulated. So this is on the basis of these different features. We can very nicely understand the difference between the futures contract and the forwards contract.