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Forward market
The
forward
market
is the
informal
over-the-counter
financial market
by which
contracts for future delivery
are
entered
into.
Standardized
forward
contracts
are called
futures contracts
and
traded
on a
futures exchange
.
It should not be
confused
with the
futures market
, as
Future contracts are traded in
exchanges
whereas a
forward contract
is traded
over the counter
.
The forward market is
highly
customized
.
Though the forward market is not
exchange
traded,
chances
of parties
defaulting
are very
low
.