A Futures Contract is a legally binding agreement to buy specified quantities of commodities or financial instruments at a specified price with delivery set at a specified time in the future.
It is important to emphasize the word Contract. The first important difference between the Futures Market and, say, the Stock Market is that the Futures Market trades contracts, not shares of stock.
You are not buying and selling a share (or piece) of a company. A Futures Contract is an agreement between investors to trade a specific quantity of a commodity or financial instrument, for example, gallons of gas or tons of wheat.
It is fairly simple to see how commodities work. An airline, for example, agrees to purchase 100,000 gallons of fuel for their planes at the current market price but does not take delivery until sometime in the future.
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