Futures

 represent a contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. Futures contracts detail the quality and quantity of the underlying asset; they are standardized to facilitate trading on a futures exchange. Some futures contracts may call for physical delivery of the asset, while others are settled in cash.

Risk
Futures contracts are used to hedge risk. Followers of the Bogleheads investment philosophy should reconsider the use of futures for long-term investing, especially if considering futures with leverage.

Costs of futures contracts
There are associated costs with futures contracts:
 * Price of the contract
 * Commissions
 * Futures contracts do not pay dividends
 * Opportunity loss of required margin amount (usually calculated by comparing to a 3 month treasure bond)
 * There is usually a fee for data from the exchange
 * Very low interest on excess margin