Futures contracts are financial derivatives that oblige the buyer to purchase some underlying asset (or the seller to sell that asset) at a predetermined price and date in the future.
A futures contract allows an investor to speculate in securities, commodities or financial instruments in long or short positions using leverage.
Futures are also often used to hedge the price movement of the underlying asset to prevent losses from adverse price changes.
There are tradable futures contracts for almost every commodity imaginable, such as grain, livestock, energy, currency, and even securities.
In the United States, futures contracts are regulated by the Commodity Futures Trading Commission (CFTC).
A horizontal spread is a simultaneous long and short position in derivatives for the same underlying asset and strike price, but with different expiration dates.
centner (abbreviated as CWT) is a standard unit of weight or mass used in some commodity markets. It can also be used to determine the price of small batches of goods.
Tick size - the minimum change in the price increment of a trading instrument.
– Tick sizes used to be in fractions (e.g. 1/16th of $1), but today they are mostly decimal based and expressed in cents.