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Futures Contracts

Agreement to buy or sell an underlying security at a predetermined date at an agreed price. The difference between futures and options is that with options the buyer has the right, not the obligation.

With futures, both parties are obliged to fulfill their part of the bargain.

Additional Comments:

An agreement to buy or sell a set number of shares of a specific stock in a designated future month at a price agreed upon today by the buyer and seller. The contract is often traded on the futures market.

A futures contract differs from an option as an option is the right to buy or sell, while a futures contract is the promise to actually make a transaction.

Related Terms:

A term used to designate all contracts covering the purchase and sale of financial instruments or ...

Refers to the option writer's (seller's) obligation to sell or buy a stock or other financial ...

Derivatives are financial instruments whose value is based on the market value of an underlying asset ...

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