Markets

A Futures contract is an agreement between two parties to buy or sell an underlying asset for a specific price at a pre-determined date in the future. It obligates the buyer to pay the price of the underlying asset by a given date. Likewise, the seller is obligated to deliver (sell) the underlying asset for a specific price at a specified date. Note that buying or selling a futures contract is not a physical transaction.

Futures contracts are traded exclusively on exchanges, with standardised contract specifications and in a regulated environment.

Futures markets trade Futures contracts, which specify that the underlying asset will be bought or sold for a specific price on a specific date in the future (also known as expiration date).
Futures and Options are two of the most commonly traded types of derivatives. Derivatives are contracts (or financial instruments) whose value derives from an underlying asset such as stocks, commodities, gold, currencies, etc.. The value of the derivative instrument changes according to the value of the underlying asset.

Exchange traded derivatives are traded through exchanges around the world where these instruments can be bought or sold, much like in the stock market.