What are Natural Gas Futures?
Natural Gas futures are useful financial instruments used by producers and marketers to manage the risk of price fluctuations in the natural gas market.
A natural gas future is a standardized contract that is traded on an exchange between two parties. The buyer of the contract agrees to accept delivery of a specified quantity of natural gas at a predetermined price at a future specified date. The seller agrees to supply such a quantity as per the contract.
Natural gas has the second-highest volume of futures contracts based on a physical commodity, and these futures are famously volatile.