Futures Contract

Business / Taxes / Futures Contract: Futures contracts, when they trade on regulated futures exchanges, obligate you to buy or sell a specified quantity of the underlying product for a specific price on a specific date. The underlying product could be a commodity, stock index, security, or currency. Because all the terms of a listed futures contract are structured by the exchange, you can offset your contract and get out of your obligation by buying or selling an opposing contract before the settlement date. Futures contracts provide some investors, called hedgers, a measure of protection from price volatility on the open market. For example, wine manufacturers are protected when a bad crop pushes grape prices up on the spot market if they hold a futures contract to buy the grapes at a lower price. Grape growers are also protected if prices drop dramatically — if, for example, there's a surplus caused by a bumper crop — provided they have a contract to sell at a higher price. Unlike hedgers, speculators use futures contracts to seek profits on price changes. For example, speculators can make (or lose) money, no matter what happens to the grapes, depending on what they paid for the futures contract and what they must pay to offset it.

Other Words for Contract

Contract Adjective Synonyms: agreement, understanding, deal, bargain, arrangement, pact, commitment, obligation, compact
Contract Verb Synonyms: catch, acquire, get, come down with, develop, become infected with, go down with
Contract Noun Synonyms: engage, agree, promise, covenant, undertake
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Futures Contract Multiple

Business / Finance / Futures Contract Multiple: Agreement to buy or sell a set number of shares of a specific stock in a designated future month at a price agreed upon today by the buyer and seller. The contracts themselves are often traded on the MORE

Nearby Futures Contract

Business / Finance / Nearby Futures Contract: When several futures contracts are considered, the contract with the closest settlement date is called the nearby futures contract. The next (or the 'next out') futures contract is the one that settle MORE

Commodity Futures Contract

Business / Finance / Commodity Futures Contract: A commodity is food, metal, or another fixed physical substance that investors buy or sell, usually via futures contracts. MORE

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