Futures Contract

Futures Contract A contractual agreement to buy or sell a specified quantity of a commodity, currency or shares at a particular price on a fixed date in the future. It differs from an option in that it does not provide an option to buy or sell, but is a definite contract to do either. Futures are a hedge against prices fluctuations for those who must buy at future dates. There are speculators who buy and sell these contracts for price. A bought futures contract can only be cancelled by a sales contract.

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