Futures Contract
A futures contract is a derivative instrument that represents a legal agreement between two parties to buy or sell an underlying asset at a predetermined price and date. These contracts are standardized and traded on stock exchanges, such as the NSE and BSE, with each contract specifying a standard lot size, price, and settlement date. The price of a futures contract often differs from the spot price of the underlying asset due to factors like the cost of carry, interest rates, and other market conditions. This variation reflects the additional costs or benefits associated with holding the asset until the contract's expiration.
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