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Futures
 

 

Although often used as a synonym for forward dealings, the term futures contract should be reserved for forward dealings where the person entering into the contract does so not with a specific future need in mind but more by way of a speculative investment. A person entering into a futures contract either for goods, currency. freight or some other benefit will usually 1 seek an opposite contract which, when set against the first, will leave him with a profit. Alternatively, he may sell the original contract on one of the exchanges that deal in futures.
The futures market is complemented by that in traded options, where dealings are in options to buy or sell at a stated future date. Because an option is not a firm commitment to deal on the part of the holder, it can usually be secured only by payment of a premium, known as a margin. The option can be sold or purchased in the same way as can a futures contract and dealings in options are often referred to as margin dealings.

Reference: The Penguin Business Dictionary, 3rd edt.