A future is an exchange traded forward contract. It is a legally binding agreement to buy or sell an asset at a specified future date, at a price that is agreed when the contract is made. The contract imposes an open-ended obligation on both parties until expiry or closing-out.

Buyers:

• They have a long position.
• They have an obligation to purchase the underlying asset sometime in the future for the price agreed when the contract was made.
• They hope prices will rise.

Sellers:

• Described as having a short position.
• They have an obligation to deliver the underlying asset at some date in the future for the price agreed when the contract was made.
• They hope prices will fall.