A futures contract can best be defined as: Hedging an asset with contracts written on a closely related, but not identical, asset. Risk that futures prices will not move directly with cash price hedged. An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future. An agreement that gives the owner the right, but not the obligeion, to buy or sell a specific asset at a specific price for a set period of time. A forward contract with the feature that gains and losses are realized each day rather than only on the settlement date