1 Forward contract refers to a contract in which both parties agree to exchange financial assets at a fixed price in the future, and a contract in which both parties promise to conduct transactions in the future under the currently agreed conditions. This contract will specify the types, prices, delivery and settlement dates of the commodities or financial instruments to be bought and sold. Forward contracts are agreements that must be fulfilled, unlike options that can choose not to exercise their rights (that is, give up delivery).

2. Forward foreign exchange trading is similar to futures trading. When you pay the forward price and your loss is greater than the deposit of the contract itself, it is usually not mandatory. Most people don't do that. Therefore, margin is needed to ensure that the interests of forward traders are improved.