What is a Futures Contract?
A futures contract is a financial contract between two parties agreeing to exchange financial items or actual commodities for future delivery at a set price. When you buy a futures contract, you are agreeing to buy an item for a set price that the seller has not yet disclosed. The prices are settled at the end of each trading day. Futures contracts are liquid, standardized, and traded on an exchange.
People who buy and sell in the futures market do not necessarily intend to receive or deliver the actual commodities. Futures buyers and sellers typically secure a contract to hedge risk or speculate. Positions are closed out before the delivery date. FXstreet.com will provide you more info on futures contracts.
