Futures trading involves buying and selling contracts that obligate the buyer to purchase, or the seller to sell, an asset at a predetermined price on a specific date in the future. These contracts can be based on various assets, including commodities like oil and wheat, or financial instruments like stock indices and currencies. Traders use futures to hedge against price fluctuations or to speculate on future price movements. Participants in futures trading include individual investors, institutional traders, and companies looking to manage risk. The market operates on exchanges, such as the Chicago Mercantile Exchange, where contracts are standardized. Futures trading can be risky, as prices can be volatile, leading to potential gains or losses.