A futures, or forward, contract involves the obligation to purchase (or deliver) a specified commodity (or financial instrument) at a specified price at some specific future period. For example, suppose it is now June, and I want to get a delivery of 42,000 gallons of heating oil (the typical contract size) in December. I might buy a December heating oil future at a price of $2.50. This commits me to take delivery of 42,000 gallons of heating oil in mid-December at a price of $2.50 per gallon. The seller of the futures contract commits to make delivery of the oil at that time.*
