Agreement to buy or sell a set number of
shares of a specific stock in a designated future month at a price agreed upon today by the buyer and seller. The
contracts themselves are often
traded on the
futures market. A futures contract differs from an
option because an
option is the right to buy or sell, whereas a futures contract is the promise to actually make a transaction. A future is part of a
class of
securities called derivatives, so named because such
securities derive their value from the worth of an
underlying investment.