Futures Contract

A futures contract is a standardized contract for selling or buying an asset, such as a physical commodity or a financial instrument, at a specified future date and at a price agreed today (the futures price). The contracts are traded on a futures exchange.

A futures contract is a forward contract standardized in term of size, deliverable grade, delivery date, and delivery location. Each individual contract for a particular commodity is identical to the next, but they differ among different commodities.

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