Options & derivatives
Futures
A futures contract is a commitment to buy or sell an asset at a set price, on a specific future date.
A futures contract is a commitment to buy or sell an asset at a set price, on a specific future date.
Unlike an option, a future is an obligation, not a right. It is used to speculate or hedge on indices, commodities or currencies. It is standardized, highly leveraged and therefore risky.
A trader buys an oil futures contract, betting its price will rise by expiry.
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