What are contracts to buy or sell an asset at a specified future date called?

Contracts to buy or sell an asset at a specified future date are commonly known as futures contracts. These agreements obligate the buyer to purchase, and the seller to sell, an asset at a predetermined price at a specific date in the future. Futures are standardized and traded on exchanges, which helps provide liquidity and price transparency to the market.

The essential aspect of futures contracts is their binding nature on both parties to fulfill the terms at the time of expiration. This structure differentiates futures from other types of contracts in this context, such as options, where the buyer has the right but not the obligation to buy or sell. Understanding the mechanics of futures contracts is crucial for participants involved in hedging or speculation in commodities, currencies, or financial instruments, as it manages the risk associated with price fluctuations over time.