What is the difference between a spot transaction and a forward transaction in the foreign exchange market? A transaction is trade today, and a transaction is trade in the future. What are the key differences between foreign-exchange forward contracts and foreign-exchange futures contracts? contracts are private agreements among traders to exchange any amount of currency on any future date, while contracts are traded on exchanges and are standardized. including a stated settlement date. With contracts, the exchange rate changes continually as contracts are bought and sold on the exchange, and with contracts, the exchange rate is fixed at the time the contract is agreed to Why are forward contracts more widely used in the foreign-exchange market than are futures contracts? Forward contracts are used 10 times more than futures contracts because the counterparty risk between big banks is relatively , and these banks value the of the forward contract