In a

futures contract In finance, a futures contract (sometimes called futures) is a standardized legal contract to buy or sell something at a predetermined price for delivery at a specified time in the future, between parties not yet known to each other. The item tr ...

where the

underlying In finance, a derivative is a contract between a buyer and a seller. The derivative can take various forms, depending on the transaction, but every derivative has the following four elements: # an item (the "underlier") that can or must be bou ...

is a physical object, such as grain or oil, the price of the futures contract is quoted assuming delivery of that physical object to a specific physical location in the world. For instance,

natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...

futures in the United States usually have the

Henry Hub The Henry Hub is a distribution hub on the natural gas pipeline system in Erath, Louisiana, owned by Sabine Pipe Line LLC, a subsidiary of EnLink Midstream Partners LP who purchased the asset from Chevron Corporation in 2014. Due to its importa ...

as a delivery point,NYMEX to Launch Nine New Natural Gas Delivery Point Pipe Options Contracts
Nymex - New York Mercantile Exchange and

gold Gold is a chemical element; it has chemical symbol Au (from Latin ) and atomic number 79. In its pure form, it is a brightness, bright, slightly orange-yellow, dense, soft, malleable, and ductile metal. Chemically, gold is a transition metal ...

may have a delivery point of New York or London. Futures contracts that differ only in the delivery point will typically have slightly different prices, reflecting localized supply and demand and transportation costs.

West Texas Intermediate West Texas Intermediate (WTI) is a grade or mix of crude oil; the term is also used to refer to the spot price, the futures price, or assessed price for that oil. In colloquial usage, WTI usually refers to the WTI Crude Oil futures contract t ...

crude oil has a delivery point to

Cushing, Oklahoma Cushing (, , ''meaning: "Soft-seat town"'') is a city in Payne County, Oklahoma, United States. The population was 7,826 at the time of the 2010 census, a decline of 6.5% since 8,371 in 2000. Cushing was established after the Land Run of 1891 b ...

References

Futures markets {{Business-term-stub