A contract between a buyer and seller in which the buyer is obligated to accept delivery and the seller is obligated to provide delivery of a fixed amount of a commodity at a fixed price and at a specified location. In contrast, option contracts donÂ’t obligate the holder to execute the contract. Futures contracts are traded exclusively on regulated commodities exchanges and are settled daily based on their current value in the marketplace. Their terms are the same; the only thing that changes is the price, which is determined usually through an auction system, called open-outcry trading, conducted on the floor of the exchange.