LeoGlossary: Futures Contract

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A *futures contract is a contract to exchange a particular security at a specific price on a specific future date.

They work similar to options contracts with one exception: buyers usually execute the contract and accept delivery of the underlying asset. This is often done as a hedge for those who are involved in the buying and selling of products such as oil, gasoline, or wheat. They do this in an effort to protect themselves against volatility in prices.

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