Futures are a type of derivative contract that obligates the buyer and seller to buy and sell an underlying asset at a predetermined price on a specific date, known as the expiration date. Unlike options, futures are binding contracts that require both parties to fulfill their obligations.

Here are some key characteristics of futures contracts:

1. Obligation: Both the buyer and seller are legally bound to buy and sell the asset at the specified price on the expiration date.

2. Specified Price: The price at which the asset will be bought or sold is fixed at the time of contract inception.

3. Specific Date: The date on which the asset will be bought or sold is predetermined.

4. Underlying Asset: Futures contracts are based on a variety of assets, such as commodities (e.g., gold, oil), currencies, indices, and more.

5. Expiration Date: The last day on which the contract can be traded or settled.

6. Margining: Traders are required to deposit margin funds to cover potential losses.

7. Leverage: Futures contracts offer leverage, allowing traders to control large positions with relatively small capital.

Futures contracts are used for various purposes, including:

1. Hedging: To manage risk and lock in prices for future transactions.

2. Speculation: To bet on price movements of the underlying asset.

3. Arbitrage: To exploit price differences between markets.

4. Spread Trading: To profit from price differences between two or more assets.

Remember, futures contracts are binding agreements that require careful consideration and risk management to avoid potential losses.