Futures Contract
InvestingGlossary term
Definition
An agreement to buy or sell an asset at a predetermined price on a specific future date. Commonly used for commodities, currencies, and stock indices. Requires margin account.
Related terms
- DerivativesFinancial contracts whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies. Includes options, futures, and swaps.
- CommoditiesBasic goods used in commerce that are interchangeable with other goods of the same type. Examples include gold, oil, wheat, and natural gas. Traded on commodity exchanges.
- MarginBorrowed money from a broker to purchase securities. Amplifies both gains and losses. Requires a margin account and maintaining minimum equity levels to avoid margin calls.
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