These are derivatives that try to mirror the movement in an underlying asset without requiring a buyer or seller to actually take or make delivery.

This can be useful for hedging purposes. For example you might hold a large portfolio of FTSE 100 shares and be worried about a short term price dip. Rather than selling the portfolio and triggering a tax bill plus all the hassle and expense of recreating it when conditions improve, you could sell a FTSE 100 future. Set up correctly this will compensate you for any dip in the FTSE 100 short-term whilst allowing you to retain your portfolio. Futures are typically exchange traded and as such tend to be easy and relatively cheap to use. However they are only suitable for experienced investors.