What are index futures?

Futures contracts started as a way farmers could sell their crops in advance of harvest to lock in a good price or to raise funds a few months before the crop was ready for market. The index futures we trade are traded on the same exchanges where agricultural commodity futures are still traded. The Chicago Mercantile exchange defines index futures as "legally binding agreements to buy or sell the cash value of the underlying Index at a specific future date." That's a big help, right? Let me see if I can do any better with some bulleted facts which should answer most questions: