An agreement traded on an organized exchange to buy or sell assets, especially commodities or shares, at a fixed price but to be delivered and paid for later.
the existence of futures contracts allows sellers or buyers to hedge against risk
Compare with forward contract
Example sentencesExamples
- The size of the initial margin deposit will vary by type of livestock futures contract and the price level.
- When banks bought gilts or German bonds whose prices were falling, their systems automatically sold futures contracts in similar bonds to hedge their losses.
- The October average daily closing price for December Chicago Board of Trade futures contracts will determine the harvest price for corn crop revenue coverage.
- You, the producer may then lock-in that price by selling a December corn futures contract through a broker.
- In Europe, when futures contracts have traded simultaneously on an exchange floor and on an electronic network, the liquidity has rapidly migrated online.