Stock market futures are contracts that obligate the buyer to purchase, or the seller to sell, a specific underlying asset (like a stock index or commodity) at a predetermined price on a future date. They are primarily used for hedging against price fluctuations and for speculation on the future direction of the market. Trading in futures contracts allows investors to gain exposure to a broad market index without actually owning the underlying stocks, and their prices often provide an indication of how the stock market is expected to open the next trading day. However, due to the leverage involved, futures trading can be highly risky.
