Futures Contract

A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash.

The terms "futures contract" and "futures" refer to essentially the same thing. For example, you might hear somebody say they bought "oil futures", which means the same thing as "oil futures contract". If you want to get really specific, you could say that a futures contract refers only to the specific characteristics of the underlying asset, while "futures" is more general and can also refer to the overall market as in: "He's a futures trader."


Investment dictionary. . 2012.

Look at other dictionaries:

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  • futures contract — noun a standardized contract, traded on a futures exchange, to buy or sell a standardized quantity of a specified commodity (or financial instrument) of standardized quality at a certain date in the future, at a price (the futures price) …   Wiktionary

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