What is futures trading?

Futures trading is a type of derivative trading where two parties agree to buy or sell an underlying asset, such as a commodity, stock, or currency, at a predetermined price and date in the future. The buyer of a futures contract is obligated to purchase the asset on the agreedupon date, while the seller is obligated to sell the asset. Futures contracts are standardized and traded on exchanges, and the prices are determined by the forces of supply and demand. Futures trading is often used for hedging and speculation purposes by investors and traders.