Futures

Futures refer to a financial contract in which parties agree to buy or sell an asset at a specified price and date in the future, typically used for commodities, currencies, and stock indices. The purpose of futures is to provide market participants with a standardized way to manage their risk exposures, whether that risk is price fluctuations or supply chain disruptions. Futures contracts protect buyers and sellers from potential losses by setting a price and quantity in advance of the transaction, which can help them operate with greater predictability and stability.