A standardized agreement to buy or sell an underlying asset at a fixed price on a specified future date.
A futures contract is a standardized, exchange-traded agreement obligating the buyer to purchase, and the seller to deliver, a specific quantity of an underlying asset at a predetermined price on a set future date. Unlike options, both parties in a futures contract have an obligation, not just a right. Futures are marked to market daily and require margin to be maintained, making them a common tool for hedging and leveraged directional trades on stocks and indices.
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