what is a commodity futures contract 
a commodity futures contract is an agreement to buy or sell a predetermined amount of a commodity at a specific price on a specific date in the future commodity futures can be used to hedge or protect an investment position or to bet on the directional move of the underlying asset many investors confuse futures contracts with options contracts with futures contracts the holder has an obligation to act unless the holder unwinds the futures contract before expiration they must either buy or sell the underlying asset at the stated price commodity futures can be contrasted with the spot commodities market 