Forwards             Futures

Contract Terms             variable             standard
Delivery                   expected             only 2-5%
Trading                    via phone            centralised
Margins                    negotiated           uniform
Credit Risk                taken by             clearing
                           counterparty         house
Liquidity                  ........             ........
Cash Flow                  ........             ........

a) The forward market is likely to be more liquid than the futures market.
b) The futures market is likely to be more liquid than the forward market.

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