Futures Contract Definition | Becker
Accounting Dictionary
Futures Contract
An agreement between two parties to exchange a commodity or currency at a specified price on a specified future date. One party takes a long position and agrees to buy a particular item, while the other party takes a short position and agrees to sell that item. Unlike an option, both parties are obligated to perform according to the terms of the contract. Futures contracts are made through a clearinghouse and have standardized notional amounts and settlement dates.