futures contract

Related Terms
Binding contract made on the trading floor of a futures exchange to buy or sell a commodity, financial instrument, or security, on a stated future date at a specified price. These agreements are standardized in terms of quantity, quality, delivery location, and delivery time for each item, and do not normally result in an actual delivery but are settled (traded out) through counter-contracts. Used in hedging, futures contracts help mitigate the risk of wild price fluctuations. In contrast to an option (right to buy or sell an item that lapses if not exercised) a futures contract is an obligation fulfilled only by the completion of the transaction.

Use 'futures contract' in a Sentence

The futures contract was an outstanding deal that was made by our investment manager as we were in a good position in the market.
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That commodity company is well known for their agents' ability to quickly close futures contracts when trading becomes fast on the trading floor.
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A futures contract would be far more risky as an investment than an outright purchase of stocks or mutual funds.
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