A futures contract is a commitment to make or take delivery of
a specific quantity and quality of a given commodity at a specific delivery location and time in the future. All contracts are ultimately settled either through liquidation by an offsetting transaction (a purchase after an initial sale or a sale after an initial purchase) or by delivery of the actual physical commodity. [1]


[1] CME Group Self-Study Guide to
Hedging with Grain and Oilseed Futures and Options

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