Futures contracts, also known as futures, are standardized agreements to buy or sell a specific quantity of a commodity or financial instrument at a set price on a future date. They are traded on futures exchanges, which are regulated marketplaces that facilitate the buying and selling of these contracts.
Futures play a crucial role in managing price risk and speculation in various markets. They allow producers and consumers to hedge against potential price fluctuations, ensuring greater stability and predictability in their operations. Futures also provide opportunities for investors to speculate on future price movements, potentially generating profits or managing risk.
