The Law Dictionary

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FUTURE Definition & Legal Meaning

Definition & Citations:

An EXCHANGETRADED DERIVATIVE contract that permits the purchaser to buy, and the seller to sell, an ASSET at a predetermined future price and delivery date. Standardized futures contracts are available on assets/securities from the FIXED INCOME, EQUITY, FOREIGN EXCHANGE, and commodity markets, and can be settled in cash or physical (depending on contract specifications). Contracts are secured by INITIAL MARGIN and are MARKEDTOMARKET on a daily basis by the CLEARINGHOUSE; VARIATION MARGINS are posted to cover daily market movement. See also FUTURES OPTION, FUTURES CALL, FUTURES PUT.


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