Commodity futures contract

(redirected from Commodity Futures Contracts)

Commodity futures contract

An agreement to buy a specific amount of a commodity at a specified price on a particular date in the future, allowing a producer to guarantee the price of a product or raw material used in production.

Commodity Futures Contract

An agreement to buy and sell a commodity at a certain date at a certain price. For example, Investor A may make a contract with Farmer B in which A agrees to buy a certain number of bushels of B's corn at $15 per bushel. This contract must be honored whether the price of corn goes to $1 or $100 per bushel. Commodity futures contracts can help reduce volatility in the normally volatile commodity markets, but contain the risks inherent to all speculative investing. These contracts may be sold on the secondary market, but the person holding the contract at its end must take delivery of the underlying. See also: Carrying charge, Options contract.
References in periodicals archive ?
agricultural commodity futures contracts traded in February 2008, compared to 90% in January 2008.
The risk of loss in trading commodity futures contracts can be substantial; therefore, only genuine risk funds should be used.
The computer system trades over 100 different financial and commodity futures contracts and makes all buy and sell decisions.
Since July, approximately 80% of soft commodity futures contracts have been traded electronically.
It modifies certain rolling rules of the underlying commodity futures contracts of the S&P GSCI(TM) index with the goal to generate enhanced returns as compared to the S&P GSCI(TM) index.
The SDCI is composed of commodity futures contracts for which active and liquid contracts are traded on futures exchanges in major industrialized countries.
NEW YORK -- The DB Commodity Index Tracking Fund (AMEX: DBC) announced in an 8-K filing with the SEC plans to adopt a change in the way it rolls commodity futures contracts with the objective of mitigating the negative effects of contango, the condition in which distant delivery prices for futures exceed spot prices.
Because the market price of shares of the iShares GSCI(R) Commodity-Indexed Trust will fluctuate based on the prices of commodity futures contracts reflected in the GSCI(R) Total Return Index, the market price of the shares will be as unpredictable as the prices of commodity futures contracts.
Currently all of the commodity exposure for each of the Funds is in the form of commodity futures contracts listed on the New York Mercantile Exchange ("NYMEX").
The Index is constructed of commodity futures contracts from the energy, industrial metals, precious metals, grains, livestock and soft sectors and offers diversified exposure to the commodity markets.
SIPC does not cover currency, interests in gold, silver or other commodity futures contracts or commodity options including forex.
The S&P WCI is the first index to consist solely of listed commodity futures contracts that trade outside of the U.

Full browser ?