Futures contract

A futures contract is an exchange-traded, standardized agreement to buy or sell a fixed quantity of an asset at an agreed price on a specified future date. Standardization of size, quality, and expiry is what lets these contracts trade liquidly on exchanges.

For a bullion trader, gold and silver futures on MCX (in India) and COMEX (in the U.S.) are the primary instruments for taking a price view. They allow leveraged exposure and hedging without storing physical metal, with positions marked to market and settled or rolled at expiry.

Leverage cuts both ways, magnifying gains and losses, and contracts carry expiries that require rolling to maintain exposure. Futures pricing reflects spot plus carry, which links it to concepts like contango, basis, and parity.