Business and Personal Finance Dictionary

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• FUTURES
  
  Contracts for the sale/purchase of a specified quantity of a financial instrument, currency, or commodity at an agreed-upon price on a given future date. First developed for agricultural commodities, actively traded futures are available for foreign currencies, stocks, stock indexes, U.S. Treasury debt, Eurodollar deposits, and other financial instruments. Futures are often used in hedging. Unlike an option, a futures contract obligates both parties to consummate the transaction. Futures are very similar to forwards - the principal difference is that futures are almost always exchange traded while forwards are traded over the counter.
  
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