Derivatives: Futures, Options, Contracts, and Much, Much More. Derivative instruments, or just derivatives as they are most popularly known, are nothing but an umbrella term for instruments like futures contracts, options, swaps, forwards contracts, and credit derivatives. Forward Contracts and Futures. Swaps, caps, and floors are recent innovations in the derivatives markets. The derivatives market traditionally included forward contracts in addition to options (puts, calls, warrants). A forward contract involved a commitment to trade a specified item at a specified price at a future date. A futures contract is a forward contract with some important differences. Explain. A futures contract is a forward contract that has been standardized and which is sold through an organized exchange. Forward contracts generally are private agreements between two parties and as a result are customized and therefore difficult to sell.