Written by the Fiveable Content Team • Last updated September 2025
Written by the Fiveable Content Team • Last updated September 2025
Definition
A futures contract is a standardized legal agreement to buy or sell something at a predetermined price at a specified time in the future. The "something" being traded can range from commodities, currencies, to financial instruments.
Related terms
Commodities Market: A marketplace where raw or primary products are exchanged, often includes trading using futures contracts.
Hedging: A strategy used to offset potential losses or gains that may be incurred by an investment, often through instruments like futures contracts.
Speculation: The act of trading in an asset, or conducting a financial transaction, that has a significant risk of losing value but also holds the expectation of a significant gain