Futures Contract
Financial term in the Investing category
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
Derivatives
Financial contracts whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies. Includes options, futures, and swaps.
Commodities
Basic 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.
Margin
Borrowed 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.
Frequently Asked Questions
What is Futures Contract?
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.
Why is Futures Contract important in personal finance?
Futures Contract is an important investing concept that helps individuals make better financial decisions. Understanding Futures Contract can improve your financial planning and help you achieve your money goals.
How does Futures Contract relate to Derivatives?
Futures Contract and Derivatives are related financial concepts. Financial contracts whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies. Includes options, futures, and swaps.
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