The sale and purchase of a commodity at a price, quantity and quality agreed in advance for delivery on a specified future date. Or, formal exchange that trades contracts for delivery of a specific type of oil in future months. Only a very small volume results in actual delivery, and in some markets there is only cash settlement. The presence of a clearinghouse and regular daily margin payments on all positions ensures the financial integrity of the operation at all times. The market is open to all participants. It is also a commodities market in which delivery of not-yet-produced goods or services are purchased and sold using auction or stock-market-style bidding procedures. Buying and selling on this market is risky for both buyer and seller, because prices may change dramatically in either party’s favor between the time that the futures contract is purchased and the time that the actual delivery and sale is made. In return for these risks, sellers can raise operating capital on this market by selling their future production, and buyers can lock in prices on needed goods and services as a hedge against unanticipated price increases. > >