futures contract

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A futures contract is a contract between two parties for the purchase of a specified commodity at a predetermined future date and price. The Commodity Futures Trading Commission (CFTC) oversees futures contracts in the United States. Many commodities may be traded by a futures contract, such as grain, livestock, energy, and securities. Futures contracts can help to hedge against price movements.

[Last updated in December of 2022 by the Wex Definitions Team]