There is a preferece for futures over forwards due to the mark to market feature which arises when there is a positive correlation between the underlying asset price and interest rates.
Can someone say why the mark to market is only beneficial if there is positive correlation to interest rates?
because the price difference is settled everyday, when interest rate goes up, the asset’s value goes up, you get paid for the value addition everyday, which you can use to reinvest anywhere else at a higher return, but you can’t do that with forwards, it only settles when the contract expires, you lost the chance to reinvest.