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Futures Contract

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Financial Dictionary

Futures Contract

A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts detail the quality and quantity of the underlying asset they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash.

Investopedia Commentary

The terms "futures contract" and "futures" refer to essentially the same thing. For example, you might hear somebody say they bought "oil futures", which means the same thing as "oil futures contract". If you want to get really specific, you could say that a futures contract refers only to the specific characteristics of the underlying asset, while "futures" is more general and can also refer to the overall market as in: "He's a futures trader."

Related Links

Futures Fundamentals
Interpreting Volume for the Futures Market
Becoming Fluent in Options on Futures
Getting Started in Foreign Exchange Futures

See also: Commodity, Delivery, Delivery Date, Exchange, Forward Contract, Futures, Futures Market, Underlying

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Financial Dictionary

futures contract

An agreement to take (that is, by the buyer) or make (that is, by the seller) delivery of a specific commodity on a particular date. The commodities and contracts are standardized in order that an active resale market will exist. Futures contracts are available for a variety of items including grains, metals, and foreign currencies. See also Section 1256 contracts.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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Legal Dictionary

Main Entry: futures contract
see CONTRACT
Merriam-Webster's Dictionary of Law, © 1996 Merriam-Webster, Inc.
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