ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -It is called a futures contract or futures. Futures are a legal agreement, which authorises the writer and the owner to buy or sell a commodity or stocks at a predecided price and date in the future.

Detailed explanation-2: -A commodity futures contract is an agreement to buy or sell a particular commodity at a future date. The price and the amount of the commodity are fixed at the time of the agreement. Most contracts contemplate that the agreement will be fulfilled by actual delivery of the commodity.

Detailed explanation-3: -A futures contract is a legal agreement to buy or sell a particular commodity asset, or security at a predetermined price at a specified time in the future. Futures contracts are standardized for quality and quantity to facilitate trading on a futures exchange.

Detailed explanation-4: -Futures-also called futures contracts-allow traders to lock in the price of the underlying asset or commodity. These contracts have expiration dates and set prices that are known upfront. Futures are identified by their expiration month.

Detailed explanation-5: -Commodity futures are derivative contracts in which the purchaser agrees to buy or sell a specific quantity of a physical commodity at a specified price on a particular date in the future. Derivatives are investments that derive their value from the price of another asset, typically called the underlying asset.