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Investment
Futures Contract
A standardised agreement to buy or sell an asset at a fixed price on a future date.
Futures are traded on exchanges like CME. They are used for hedging (reducing risk) or speculation. Unlike options, futures create an obligation — you must fulfil the contract or close it before expiry.
It's a promise to buy or sell something later at today's agreed price — used by farmers, airlines, and traders.
Real world: An airline buys oil futures to lock in fuel prices six months ahead. If oil rises they still pay the lower futures price. Speculators trade oil futures purely to make profit from price moves.
💡 Futures let you lock in prices or bet on future moves in oil, gold, indices, and currencies.