An agreement to buy or sell the underlying commodity or asset at a specific price at a future date.
 | | Futures Contract | | A futures contract is a legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange. The buyer of a futures contract is taking on the obligation to buy the underlying asset when the futures contract expires. The seller of the futures contract is taking on the obligation to provide the underlying asset at the expiration date. | | Breaking it Down: | | "Futures contract" and "futures" refer to the same thing. For example, you might hear somebody say they bought... | | Read More » | | Related to "Futures Contract" | | | | Wide Basis | | A wide basis occurs in the futures market when the spot price of a commodity is not close to the futures contract price for that commodity. | | Read More » | | | Current Delivery | | Current delivery is a specific type of futures contract that requires the delivery of the underlying commodity in the current month, or close to it. | | Read More » | | | Front Month | | Front month refers to the futures contract in each market with the shortest time to delivery. It is usually, but not always, the current month's contract. | | Read More » | | | | | | CONNECT WITH INVESTOPEDIA | | | | | | | |
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