futures

Contracts for the sale/purchase of a specified quantity of a financial instrument, currency, or commodity at an agreed-upon price on a given future date. First developed for agricultural commodities, actively traded futures are available for foreign currencies, stocks, stock indexes, U.S. Treasury debt, Eurodollar deposits, and other financial instruments. Futures are often used in hedging. Unlike an option, a futures contract obligates both parties to consummate the transaction. Futures are very similar to forwards - the principal difference is that futures are almost always exchange traded while forwards are traded over the counter. American Banker Glossary
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A term used to designate all contracts covering the sale of financial instruments or physical commodities ( physical commodity) for future delivery on a commodity exchange. Bloomberg Financial Dictionary
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The standardized contracts covering the purchase and sale of financial instruments or physical commodities for future delivery on a regulated commodity futures exchange. Chicago Mercantile Exchange Glossary
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A futures contract is an agreement or obligation to buy or sell a given quantity of a particular security, at a specified future date at a pre-determined price. London Stock Exchange Glossary

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futures fu‧tures [ˈfjuːtʆəz ǁ -ərz] noun [plural]
FINANCE buying and selling futures contracts:

Corn futures prices rose as forecasts raised fears that the weather may damage the corn crop at a critical stage of its development.

Precious metals futures prices declined, with silver temporarily dropping below the critical $5-an-ounce level.

comˈmodity ˌfutures FINANCE
agreements to buy or sell a particular amount of a product or type of raw material that is sold in large quantities :

• a registered commodity futures broker

ˈcurrency ˌfutures FINANCE
agreements to buy or sell a fixed amount of currency on a fixed date in the future at a fixed price
ˈdeath ˌfutures
informal disapproving FINANCE INSURANCE life insurance policies owned by people who are very ill and expected to die soon, and which are bought cheaply by investors as short-term investments
fiˈnancial ˌfutures FINANCE
agreements to buy or sell on a fixed date at a fixed price a particular amount of currency or a particular security:

• By trading financial futures contracts, companies try to hedge against swings (= protect themselves against possible changes ) in the value of its securities holdings.

ˈindex ˌfutures FINANCE
futures in the value of a share index (= the average value of a group of shares on a particular stockmarket):

• He has bought stock index futures contracts that give him the right to purchase a basket of stocks at specified prices.

ˈinterest-rate ˌfutures FINANCE
futures contracts based on the value of changes on interest rates at a point in the future:

• At the London Futures & Options Exchange, there is an interest rate futures contract on UK mortgages.

ˈstock ˌindex ˌfutures FINANCE
futures contracts based on the value of a stock index at a point in the future, for example three or six months later:

• Stock index futures let investors bet on a basket of stocks without owning the actual shares.

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   A future is an undertaking to buy or sell a standard quantity of a financial asset or commodity at a future date and at a fixed price. Futures resemble forwards, but are standardized contracts (i.e. every futures contract has standardized terms that dictate the size, the unit of price quotation, the delivery date and contract months) and must be traded on a recognized exchange. Price movements are expressed in ticks (the smallest unit of price quotation). Delivery of a future is rare. As the delivery date draws near, most investors close out their positions by undertaking an equal and opposite trade. The futures markets bring together hedgers who wish to protect themselves against the rise or fall of prices, and speculators who are trying to benefit from such movements. A clearing house acts as the counter party in every transaction to protect against the risk of default, so the buyer and seller do not have to deal directly with each other. Futures developed as a method for establishing forward purchase prices and managing price instability caused by seasonal factors in agricultural markets. Today, interest rate and stock index futures attract the greatest volume.
   ► See also Clearing House, Forwards, Hedging, Margin, Option, OTC, Tick.

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futures UK US /ˈfjuːtʃəz/ noun [plural] (also futures contract [C]) FINANCE, STOCK MARKET
agreements to buy and sell particular shares, goods, etc. on a particular date in the future at a fixed price. Futures can be traded on financial markets: corn/gold/oil futures »

Oil futures topped $88 a barrel for the first time.

»

currency/bond/dollar futures

»

Winter wheat was quoted at 57 cents a bushel more than the July futures price.

See also COMMODITY FUTURES(Cf. ↑commodity futures), DEATH FUTURES(Cf. ↑death futures), FINANCIAL FUTURES(Cf. ↑financial futures), INDEX FUTURES(Cf. ↑index futures), INTEREST RATE FUTURES(Cf. ↑interest rate futures), STOCK INDEX FUTURES(Cf. ↑stock index futures)

Financial and business terms. 2012.

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