Futures contracts

Definition

A futures contract is a standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future. The "something" being traded can range from commodities, currencies, to financial instruments.

Related terms

Commodities Market: A marketplace where raw or primary products are exchanged, often includes trading using futures contracts.

Hedging: A strategy used to offset potential losses or gains that may be incurred by an investment, often through instruments like futures contracts.

Speculation: The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing value but also holds the expectation of a significant gain