What is futures?Futures
Standardized exchange-traded contracts to buy or sell an asset on a future date at a price fixed today.
Learn “futures” in an animated lesson
- Futures BasicsBasis and Convergence at Expiry
The futures price isn't the same as the spot price, and the gap between them is the basis. As expiry approaches, the futures price moves toward spot.
- Futures BasicsWhat Are Futures?
A farmer and a bakery agree today on the price of wheat in 3 months. That's a futures contract: a standardized agreement to buy or sell at a fixed price in the future.
- Hedging StrategiesWhat Is Hedging?
A farmer has a silo of wheat and fears prices falling before the harvest. Sell a futures contract, and the gains and losses on the two legs cancel out.
Related terms
See how “futures” works for yourself with an animation you can drag and play.
Go to “Basis and Convergence at Expiry”