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The parties who enter into a forward contract are on their own, and they have to take all precautions to safeguard their interests. If the participants are not experienced professionals, it is advisable for them to deal with an exchange rather than getting involved in forward contracts. In case the participants cannot find exactly what they want in a futures market, still they can find something very close to their requirements because markets are nearly complete in economic sense. Futures contracts can be closed out by entering into an offsetting transaction, making physical delivery or cash settlement Compared to futures contracts, forward contracts are illiquid, have credit risk and are unregulated

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