When an agreement is made to acquire goods or services on the futures market, the buyer and seller enter into a futures contract. This contract assures the seller that the buyer will pay the agreed-upon price for a predetermined quantity of the commodity. In return, the buyer can lock in a price for the commodity regardless of the market price when the commodity is delivered.

Technically speaking, when a purchase is made on the futures market, the only thing bought or sold is the contract. Since the seller doesn't sell the commodity until the date on the contract, no actual commodity is sold under the contract until that date.

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