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Glossary · PSX term

Futures contract.

A futures contract is an agreement to buy or sell a security at a set price on a future date.

Definition

On the PSX, single-stock futures let investors take leveraged positions, with cash-settled and deliverable variants. Futures can be used to speculate or hedge, but leverage magnifies both gains and losses.

Worked example

A trader expecting OGDC to rise may buy its futures contract instead of the shares to gain leveraged exposure.

Related on PSX Clarity

Term
Deliverable futures
Term
Cash-settled futures
Term
Margin financing
Term
Rollover week

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