Futures Contract

A futures contract is an agreement to buy or sell something at a set price on a specific future date. Unlike stocks, where you own a piece of a company, futures let you bet on the price direction of commodities (like oil or wheat), currencies, or even stock indexes—without owning the actual thing. You'll encounter futures in financial news and among active traders because they offer leverage (control large amounts with small upfront money), but that also means bigger potential losses. For example, a trader might buy a wheat futures contract betting the price will rise by harvest time. Futures are riskier than stocks and require more experience, so most retail investors start elsewhere.