Börsenlexikon: Futures

Futures are all forward contracts, regardless of whether they are commodities or financial futures. In order for futures to be traded on exchanges, they are standardised in terms of size, type, quality and delivery dates. These terms vary from exchange to exchange.

For example, if you buy a futures contract to deliver an ounce of gold in six months, you hope to be able to resell the contract at a profit within the six months. Thus, you hope for rising prices. Your partner, the futures seller, hopes for falling prices. In this case, he would receive the agreed price from you or the buyer of the contract and could obtain the gold to be delivered more cheaply on the market. In practice, of course, the buyer of the contract would only pay the difference between his purchase price and the current price of gold.