Futures

Futures

A financial contract that obligates the buyer (seller) to purchase (sell and deliver) financial instruments or physical commodities at a future date, unless the holder's position is closed prior to expiration.

Notes:

Futures are often used by mutual funds and large institutions to hedge their positions when the markets are rocky, preventing large losses in value.

The primary difference between options and futures is that options provide the holder the right to buy or sell the underlying asset at expiration, while futures contracts holders are obligated to fulfill the terms of their contract.

See also: Commodity, Futures Contract, Futures Market, Hedge, Index Futures, Introducing Broker -IB, Managed Futures Account, National Futures Association - NFA

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Futures

A term used to designate all contracts covering the sale of financial instruments or physical commodities for future delivery on a commodity exchange.