Futures Contract

It is an agreement to buy or sell financial instruments at a specified time in the future, at a predetermined price. Futures contracts are derivative instruments, meaning their price is directly dependent on the price of the underlying instrument on which the contract is based. Futures contracts are standardized instruments, and the exchange where they are traded strictly defines the trading conditions for contracts of a particular type, including contract size, currency, expiration date, minimum price fluctuation (tick or pip), contract nomenclature, and other terms.