futures vs. forwards

CFA Level II
#1

I understand that the futures price must equal the spot price at expiration to prevent arbitrage , but , why isnt this true for forwards as well ?

Another thing , why do we account for the carrying costs in futures and ignore them in forwards ?

#2

It is.

We don’t ignore them in forwards.

#3

Thx for the clarification , but I am confused now cuz both concepts were only addressed in the futures reading, that’s why I thought they are futures specific , what am I missing here ?

#4

Because forwards aren’t traded actively you don’t see the convergence of the forward price to the spot price as vividly as you do for futures; nonetheless, the prices do converge.

I don’t know why they don’t mention carrying costs in the section on forwards; it’s pretty basic and widly recognized. I know that at Level III they mention it.

#5

I see , thanks once again

#6

My pleasure.