Both forward contracts and futures contracts have the same objective - to purchase or sell an asset at a specific price on a particular future date. Despite their common objective, there are a few crucial differences between these two contracts.
Firstly, forward contracts are usually entered into by two or more parties who are acquainted with each other. In future contracts, however, there are only two parties whose identities are often unknown to each other. Secondly, future contracts are traded on exchanges, whereas forward contracts are not. And finally, future contracts are standardized and heavily regulated by multiple participants, whereas forward contracts are customized and unregulated.