An agreement to buy or sell a standard quantity of a commodity - such as gold, $US or bank bills of exchange - on a specific future date at an agreed price determined at the time the contract is traded on the futures exchange. It is a binding contract, enforceable at law. Futures contracts are traded by open outcry on the floors of most futures exchanges, although the computer age has seen the spread of screen trading. See also: clearing house, contract, futures markets, Sydney Futures Exchange Clearing House, Sydney Computerised Overnight Market.
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