Futures
Futures Market
The futures market is a centralized exchange where buyers and sellers from around the world trade standardized futures contracts. Prices are driven by global supply and demand, and reflect a broad consensus. In that way, the futures market can provide estimates of future commodity prices.
Futures Contract
A standardized contract to buy or sell a commodity:
• in a fixed quantity
• of a fixed quality
• to a fixed place
• in a fixed time period
The buyer of a futures contract has right and obligation to buy the commodity.
The seller of a futures contract has right and obligation to sell the commodity.