If you have ever agreed today on a price for something you will actually pay and receive next month — like a concert ticket from a friend — you have already used the idea behind a forward contract. Now we apply that simple idea to the multi-trillion-dollar world of futures markets, where standardized contracts, clearinghouses, and daily cash settlements turn promises into tradable contracts. This chapter shows you exactly how forwards and futures work, how they are priced, and why the difference between them matters.