Futures

A future is a tradeable contract that commits you to taking delivery (if you buy), or making delivery (if you sell), of an agreed amount of something at an agreed time.

A "future" is a tradable contract that commits you to taking delivery (if you buy), or making delivery (if you sell), of an agreed amount of something at an agreed time.Futures contracts are typically used for trading commodities (such as oil, gold, corn or even lean hogs) or foreign currencies.

For example, you might buy a contract to take delivery of ten tons of iron at £10,000 on a date in February. If you pay a 10% deposit on the iron (£1,000) to secure the contract and if the price per ton had risen to £1,400 by the time you took delivery in February, you would make a £4,000 profit on the iron by selling it for £14,000. If prices fall you'll lose money.

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