The Simplest Explanation of Futures Contracts
Futures Contracts: A Simplified Explanation
Futures contracts are simply agreements to buy or sell a specific asset (commodity, currency, stocks, etc.) at a specified price on a future date.
Imagine it as agreeing today to buy a specific commodity, like a barrel of oil, not at today's price, but at a price you both agree on now, to be delivered and paid for later (for example, in 3 months).
