The futures and forwards are more or less similar as in both these cases; the investor locks the future price of the asset. However, in the case of forwards, counterparty risk exists that is not present in the futures market as the clearing house guarantees the completion and execution of the contract. Options on the other hand provide the buyer with the right to honor the contract and are not obligatory like futures and options. For this right, options require the payment of an option premium at start while the forwards and futures do not require any cash outflow. They have zero value at start. Swaps are more popular in the fixed income securities market wherein the fixed rate payers and receivers can swap their interest payments for variable rates and vice-versa. All the derivative contracts serve to minimize the variability of the returns of the portfolio and the investor can select from the contracts on the basis of their return and risk objectives.