Futures contract


 

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Futures contract

A legal agreement to make or take delivery of a specified instrument (for example, a commodity such as coffee or a financial instrument such as shares) at a fixed future date at a price determined at the time of dealing.

Futures contract

A legally binding agreement to buy or sell a commodity or financial instrument in a designated future month at a price agreed upon today by the buyer and seller. Futures contracts are standardized according to the quality, quantity, and delivery time and location for each commodity. A futures contract differs from an option because an option is the right to buy or sell, while a futures contract is the promise to actually make a transaction. A future is part of a class of securities called derivatives, so named because such securities derive their value from the worth of an underlying investment.



Futures contract

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Delegation by one firm of a portion of its production process, under contract, to another firm, including in another country. An example of fragmentation.


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A sale in which the title to property or goods remains with the seller until the purchaser has fulfilled the terms of the contract, usually payment in full.


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Installment Contract

A method of purchasing by installment (usually monthly) payments. When referring to real property, it is usually called a land contract.


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