The futures rate is the agreed-upon price specified in a futures contract for the purchase or sale of an underlying asset at a future date. Futures contracts are standardized agreements traded on exchanges and involve assets such as commodities, currencies, or financial instruments.
Basic Definition In its simplest form, the futures rate represents the forecasted valuation of the underlying asset at the contract’s expiration date. It includes considerations for factors such as interest rates, storage costs, and expectations of future price movements.