Fact of the Day: What does futures mean? A future is a financial contract in which a buyer promises to buy a physical asset or financial instrument (stock, bond, etc) at a predetermined date and price. The contracts essentially determine the quality and quantity of the asset being bought or sold. Simply put, they can protect producers and suppliers from price changes. Futures can be used to hedge or speculate on the future price movement of an asset. For example: a producer of wheat could use futures to lock in a certain price to minimize potential risks (hedge). Someone can also speculate the price movement by going long or short on futures. In other words, producers and supplier reduce their risks as well as rewards by locking in on futures contracts with investors. To find out more visit investicate.weebly
Posted on: Tue, 09 Dec 2014 16:32:48 +0000
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