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1) What is the main differencebetween spot and forwards?2)What is the main difference...


1) What is the main difference between spot and forwards?

2) What is the main difference between forwards and options?


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Answer #1

1) What is the main difference between spot and forwards?

In spot market, the transaction happens today at the spot rate.

In forwards market, the transaction happens on a later date, but only the price is fixed today.

2) What is the main difference between forwards and options?

In forwards contract both the parties have an obligation to fulfill their respective buy or sell agreement.

In options contract, the buyer of the option has the right to buy/sell, but the seller of the option has an obligation to buy/sell the asset.

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