Futures are financial contracts that obligate the buyer to purchase, or the seller to sell, an underlying asset at a predetermined price on a specified future date. Futures contracts are commonly used to trade commodities (such as oil, gold, and wheat) and financial instruments (such as stock indices, currencies, and interest rates). Unlike spot markets, where the transaction occurs immediately, futures contracts focus on price movements over time.
How Futures Work
A futures contract specifies:

The asset (e.g., gold, oil, or a stock index).
The quantity of the asset.
The delivery date in the future.
The agreed-upon price at which the transac...