Future what does it mean

Term » Definition. Word in Definition. Princeton's WordNet 4. Wiktionary 2. There is no future in dwelling on the past. Future generations will either laugh or cry at our stupidity. Webster Dictionary 1. Freebase 4. Chambers 20th Century Dictionary 3. Editors Contribution 0. The future is easily created from the present. Submitted by MaryC on February 16, Suggested Resources 4. Matched Categories Grammar Tense.

How to pronounce future? Alex US English. David US English. Mark US English. Daniel British. Libby British.

Mia British. Karen Australian. Hayley Australian. Natasha Australian. Veena Indian. Priya Indian. Neerja Indian. Zira US English.

Oliver British. A corporation may enter into a physical delivery contract to lock in—hedge—the price of a commodity they need for production. However, most futures contracts are from traders who speculate on the trade. These contracts are closed out or netted—the difference in the original trade and closing trade price—and are a cash settlement. A futures contract allows a trader to speculate on the direction of movement of a commodity's price.

If a trader bought a futures contract and the price of the commodity rose and was trading above the original contract price at expiration, then they would have a profit. Before expiration, the buy trade—the long position —would be offset or unwound with a sell trade for the same amount at the current price, effectively closing the long position. The difference between the prices of the two contracts would be cash-settled in the investor's brokerage account, and no physical product will change hands.

However, the trader could also lose if the commodity's price was lower than the purchase price specified in the futures contract. Speculators can also take a short or sell speculative position if they predict the price of the underlying asset will fall.

If the price does decline, the trader will take an offsetting position to close the contract. Again, the net difference would be settled at the expiration of the contract. An investor would realize a gain if the underlying asset's price was below the contract price and a loss if the current price was above the contract price. It's important to note that trading on margin allows for a much larger position than the amount held by the brokerage account. As a result, margin investing can amplify gains, but it can also magnify losses.

In this case, the broker would make a margin call requiring additional funds to be deposited to cover the market losses. Futures can be used to hedge the price movement of the underlying asset. Here, the goal is to prevent losses from potentially unfavorable price changes rather than to speculate. Many companies that enter hedges are using—or in many cases producing—the underlying asset.

For example, corn farmers can use futures to lock in a specific price for selling their corn crop. By doing so, they reduce their risk and guarantee they will receive the fixed price. If the price of corn decreased, the farmer would have a gain on the hedge to offset losses from selling the corn at the market. With such a gain and loss offsetting each other, the hedging effectively locks in an acceptable market price.

The CFTC is a federal agency created by Congress in to ensure the integrity of futures market pricing, including preventing abusive trading practices, fraud, and regulating brokerage firms engaged in futures trading.

Let's say a trader wants to speculate on the price of crude oil by entering into a futures contract in May with the expectation that the price will be higher by year-end. However, the trader will only need to pay a fraction of that amount up-front—the initial margin that they deposit with the broker.

From May to December, the price of oil fluctuates as does the value of the futures contract. If oil's price gets too volatile, the broker may ask for additional funds to be deposited into the margin account—a maintenance margin. In December, the end date of the contract is approaching, which is on the third Friday of the month. Futures contracts are an investment vehicle that allows the buyer to bet on the future price of a commodity or other security. There are many types of futures contracts available, on assets such as oil, stock market indices, currencies, and agricultural products.

Unlike forward contracts, which are customized between the parties involved, futures contracts trade on organized exchanges such as those operated by the CME Group Inc. Futures contracts are popular among traders, who aim to profit on price swings, as well as commercial customers who wish to hedge their risks.

Yes, futures contracts are a type of derivative product. They are derivatives because their value is based on the value of an underlying asset, such as oil in the case of crude oil futures. Like many derivatives, futures are a leveraged financial instrument, offering the potential for outsize gains or losses. As such, they are generally considered to be an advanced trading instrument and are mostly traded only by experienced investors and institutions.

Oftentimes, traders who hold futures contracts until expiration will settle their position in cash. In other words, the trader will simply pay or receive a cash settlement depending on whether the underlying asset increased or decreased during the investment holding period.

In some cases, however, futures contracts will require physical delivery. In this scenario, the investor holding the contract upon expiration would be responsible for storing the goods and would need to cover costs for material handling, physical storage, and insurance. CME Group. American Style Options. Commodity Futures Trading Commission. Trading Instruments. The destruction caused by a pandemic helps to clear the way for a future resurgence. It seems counterintuitive because education is the best way to protect ourselves from future crises.

The competition is expected to remain neck-and-neck for the foreseeable future. Espina said Moreno would face future persecution if she were to return to her country.