Futures contract

A futures contract is an agreement between two people to buy or sell something at a certain price on a certain date. It’s like a bet between two people about what the price of an item will be in the future. For example, if you think the price of wheat will go up, you can buy a wheat futures contract, which means someone else has agreed to sell you wheat for a certain price in the future. If the price does go up, then you will make money because you get to buy the wheat at a lower price than everyone else. On the other hand, if the price goes down, then the other person will make money because they sold you the wheat at a higher price than everyone else.