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What Is a Futures Contract?
Buying or selling something tomorrow, at today's price
A futures contract is an agreement to buy or sell an asset at a set price on a future date. Oil companies buy futures to lock in prices. Airlines hedge jet fuel costs with them. Traders speculate on price direction. Unlike stocks, futures expire — you must close the position or take delivery. The CME Group is the world's largest futures exchange.
Quick check
What is the primary original purpose of futures contracts?