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Futures contract
/fjˈuːtʃəz kˈɒntɹakt/
/fjˈuːtʃɚz kˈɑːntɹækt/Futures contract
01
an agreement to buy or sell goods or assets at a predetermined price but delivered and paid for at a later time
futures contract
n
Example
A multinational corporation could use futures contracts to hedge against currency exchange rate risks when planning future international transactions.
Farmers often use a futures contract to lock in a price for their crops ahead of the harvest, protecting themselves against price fluctuations in the market.
Investors use futures contracts to speculate on the future price of commodities like gold or oil, aiming to profit from price movements.
Futures contracts are commonly traded on exchanges such as the Chicago Mercantile Exchange, where traders can buy and sell contracts based on the future prices of various financial instruments.
An airline company might enter into a futures contract to purchase jet fuel at a fixed price, helping to manage costs and budget more accurately.
