A futures contract is an agreement (contract) to buy or sell an underlying asset on an agreed future date and for a price fixed in advance. The underlying asset of a futures contract can be a commodity, foreign currency, equity, interest rate , real estate or any other asset class and the contract are traded exclusively on exchanges, with standardized contract specifications and in a regulated environment. Buying or selling futures contract is not a physical transaction. The contract allows you to buy or sell the underlying physical product at a later date in the future. The value of the futures contract can rise or fall and is bought and sold on a futures exchange.
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