Quick Definition

Futures are financial contracts obligating the buyer to purchase an asset, or the seller to sell an asset, at a predetermined future date and price.

Examples

• 1A farmer sells a futures contract for wheat to lock in a price for his crop, ensuring a stable income regardless of market fluctuations.
• 2An investor buys oil futures to speculate on the rise of oil prices, aiming to profit from the expected increase.
• 3A manufacturer purchases aluminum futures to secure a consistent price for raw materials, helping manage budget forecasts.

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