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Futures
A contract traded on an organized market which requires the seller and the buyer to deliver and take delivery of, respectively, or to settle in cash, a fixed amount or quantity of an underlying (for example a financial asset, an index or a commodity) at a fixed price on a predetermined future date.
(1) Futures differ from forwards in that their terms and conditions are standardized to make these contracts easily tradable on an organized market whereas the terms and conditions associated with forwards are customized and negotiated directly by the parties.
(2) Futures differ from options, which give the holder the right, but not the obligation, to buy or sell the underlying.
(3) In most cases, the position is closed prior to maturity, with no delivery of the underlying.
(4) Futures include currency futures, interest rate futures, stock index futures, single stock futures, physical commodity futures and credit futures.
Translations
Synonyms and variations
- Commodity future 1.
- Commodity futures 1.
- Commodity futures contract 1.
- Future
- Futures contract