Futures Contract

A futures contract is an agreement to buy or sell something at a set price on a specific future date. Unlike stocks, you're not buying the actual asset right now—you're locking in a deal to trade it later. You'll encounter futures in commodities (oil, wheat, gold) and financial markets, and they matter because they let traders bet on price movements without owning the underlying asset, though they also carry higher risk. For example, a trader might buy a wheat futures contract agreeing to purchase 5,000 bushels in three months at $6 per bushel, hoping the price rises so they profit on the difference. Most retail investors stick to stocks, but futures are worth understanding because they influence broader market prices.