A forward contract is not the same as a futures contract. Both agreements bind traders to buy and sell an asset (or settle the exchange in cash) at a predetermined price in the future. However, there are a few key differences between them, which are as follows:
Forward contracts are...
Traded over-the-counter (OTC)
Non-standardised (can be customised)
Negotiable
Futures contracts are...
Traded on exchange
Standardised (can't be customised)
Non-negotiable

Forward contracts and futures contracts are both derivatives used to lock in prices, but they differ in structure and risk. A forward contract is a private agreement between two parties, customised in terms of size, date, and asset. This flexibility is useful, but it carries higher counterparty risk since there is no central clearing.

Futures contracts are standardised and traded on exchanges. They use daily settlement and margin requirements, which reduce default risk and improve transparency. Futures also offer higher liquidity, making them easier to enter and exit.

The downside of futures is limited flexibility due to standardisation. Forwards, while tailored to specific needs, lack liquidity and are harder to exit early. The choice depends on whether flexibility or safety and liquidity matter more.