Definition

Financial contracts obligating parties to buy or sell assets at predetermined future dates and prices, essentially allowing traders to bet on tomorrow's commodity prices today. These derivatives let farmers hedge against price drops and speculators gamble on market movements without ever touching an actual bushel of wheat. The futures market adds liquidity and price discovery to markets while giving financial news anchors something to dramatically discuss at market close.

Example Usage

Oil futures jumped 5% on speculation that production cuts would tighten global supply.

Source: Financial terminology

Related Terms

Beginner

basis of accounting

The fundamental method used to determine when transactions are recorded—either when cash moves (cash basis) or when obligations occur (accrual basis). Like choosing whether to count calories when you eat or when you order.

đź’° Finance / Accounting
Intermediate

accrued liabilities

Expenses that have been incurred but not yet paid or formally billed—money you owe but haven't written a check for yet. They lurk on the balance sheet as a reminder that obligations don't disappear just because the invoice hasn't arrived.

đź’° Finance / Accounting
Beginner

payoff

The moment when someone finally gets their money—whether it's a legitimate payment, a well-earned reward, or an envelope full of cash to look the other way. In finance, it's the return on investment; in real life, it's what makes sitting through terrible meetings almost worthwhile. The term conveniently covers everything from dividends to bribes.

đź’° Finance / Accounting
Beginner

debt

Money you owe someone else, transforming your future earnings into their present income. It's the financial arrangement that keeps credit card companies, student loan servicers, and your anxiety levels thriving. Accountants prefer to call it "leverage" when they want to make it sound strategic rather than terrifying.

đź’° Finance / Accounting
Advanced

actuarial

Relating to those mysterious number wizards called actuaries who calculate risk, probability, and future costs using mathematics that would make most people weep. It's the science of predicting when you'll die, how likely your house is to burn down, and how much money a pension fund needs—cheerful stuff. If it involves insurance, statistics, and existential dread, it's probably actuarial.

đź’° Finance / Accounting
Intermediate

pledge

A solemn promise with actual consequences, ranging from fraternity hazing rituals to legal guarantees securing debt repayment. In finance, it's collateral you offer up to convince someone you're good for the money; in Greek life, it's the person who hasn't earned their letters yet and does all the grunt work. Either way, someone's on the hook for something.

đź’° Finance / Accounting

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See “futures” in Corporate Speak, Gen-Z Slang, Pirate Speak, and more.

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