when equities are the underlying asset traders who hold futures contracts until expiration settle their positions in cash the trader will pay or receive a cash settlement depending on whether the underlying asset increased or decreased during the investment holding period in some cases however futures contracts require physical delivery in this scenario the investor holding the contract until expiration would take delivery of the underlying asset 
the bottom lineas an investment tool futures contracts offer the advantage of price speculation and risk mitigation against potential market downturns however they come with some drawbacks taking a contrary position when hedging could lead to additional losses if market predictions are off also the daily settlement of futures prices introduces volatility with the investment s value changing significantly from one trading session to the next 