Glossary entry
A futures contract is a standardized agreement traded on an exchange to buy or sell a specified underlying at a future date under set terms. Contracts define quantity, quotation, expiry, and settlement, which may involve physical delivery or cash. Margin supports performance, and gains or losses are generally reflected through daily settlement.
Illustrative example
A wheat futures contract specifies a quantity, delivery framework, and contract month. A trader can usually offset the position before expiry, subject to market liquidity and rules.
What to consider
Futures can create large exposure from limited margin. Understand delivery obligations, expiry deadlines, contract multipliers, and potential additional funding requirements.
General information, not a personal recommendation. Product availability, rights, and obligations are determined by the relevant provider, jurisdiction, and approved agreements.