Futures are agreements between two parties to sell or buy an asset at a fixed date and price. These assets could be commodities such as industrial or precious metal, or oil, or a currency, Futures can be used to speculate on the price movement of an asset, but this can involve very high risk. On the other hand, the speculator will be able to profit from the risk by buying and selling their futures in anticipation of rising or declining prices, so there is potential for a high yield.
If you’d like a little more information about how futures contracts are used to manage risk, you can watch this short video explanation.
