Futures trading is a form of financial investing where participants buy and sell standardized contracts to purchase or sell an asset—such as commodities, currencies, or financial instruments—at a predetermined price on a specific future date. These contracts are traded on organized exchanges like the CME or ICE and are used for both hedging against price fluctuations and speculating for profit. Futures trading offers leverage, meaning traders can control large contract values with a relatively small initial investment, but this also increases risk. It's commonly used by institutions and experienced traders due to its potential for high returns and need for strategic risk management.