Futures are exchange-traded derivative contracts that give market participants exposure to the future price of an underlying market. They are commonly used for hedging, positioning and active trading across global markets.
A futures contract is an agreement to buy or sell an underlying asset at a set price for a future date. The underlying market can include equity indices, interest rates, government bonds, commodities, energy, metals or currencies.
Unlike a normal share purchase, a futures contract is a derivative. Its value is linked to another market rather than direct ownership of the underlying asset.
Futures prices can move with the underlying market, interest rates, economic data, earnings, commodity supply and demand, central bank decisions and market sentiment.
Market participants use futures to manage exposure, hedge portfolio risk, trade index moves, access commodity markets or take short-term positions with margin.
Futures can involve leverage, margin calls and rapid losses if the market moves against a position. This page is general information only and does not provide financial advice.
For general background on futures contracts, contract specifications, margin, settlement and the role of hedgers and speculators, see CME Group education resources.
CME Group: Introduction to Futures