Bond Forwards versus Bond Futures

Bond Forwards versus Bond Futures

Intuition Publishing
Updated Sep 24, 2020

We differentiate between bond forward contracts and bond futures contracts by outlining the characteristics of each, and describing the obligations and exposures of the long and short positions in a forward bond transaction. We then compare the counterparty risks and the flexibility of bond forwards and futures, and the impact of the Dodd-Frank reforms on bond forwards.