A standardized futures contract includes a set of unique specifications, regardless of the exchange. Various aspects of the contract, such as quantity, expiration, delivery procedures, and price quotations, are governed by these standards.
Specifications for futures contracts vary depending on the product. Several elements, on the other hand, are common across a large range of asset classes. Let’s look at some of the most prevalent ones.
Where can I get futures specifications?
Visit the CME Group Resource Center, which is available online at Daniels Trading, for more information on futures contract parameters.
What are the terms and conditions of a futures contract?
The quantity of product provided for a single futures contract, also known as contract size, is specified in each futures contract. For example, contract quantities defined in the futures contract specification include 5,000 bushels of maize, 1,000 barrels of crude oil, and $100,000 in Treasury bonds.
What are the contract terms and conditions?
Contract specsAn assembly of applicable standard and one-time-use requirements supplemented with lists and descriptions of items of work and construction details developed for a specific contract.
What is the normal contract size for futures?
Futures are traded in standardized contracts rather than shares, as stocks are. The size of each futures contract is determined by the futures market on which it trades. The contract size for gold futures, for example, is 100 troy ounces. This means that if you buy one contract of gold futures, you get 100 troy ounces of gold. A $1 increase in the price of gold would result in a profit of $100 ($1 x 100 ounces). Because the quantity of different futures changes, a novice trader must become familiar with each commodity and futures contract.
How are tick values for futures determined?
The tick value of a product is calculated.
size necessitates data from both the Tick and the
The Product and the Table Setup
Setup the table.
Determine the base tick.
by dividing the numerator by the denominator of the Product
Take a look at the connected
Refer to the correct higher price limit and Ticks multiplier in the tick table.
Determine the tick’s size.
by multiplying the base tick value by the Ticks multiplier from the tick table
The basic tick value of, for example, is
The multiplier for all prices may be displayed as 1/100=.01 for a product.
is a 1
In a futures contract, what is a tick value?
The Futures Contract Specifications page gives you a comprehensive overview of contract specifications as given by the exchanges. Specifications are categorized by market (Currencies, Energies, Financials, Grains, Indices, Meats, Metals and Softs).
- Months – A certain month during which a futures contract’s delivery may take place. Months are usually referred to in commodity exchanges by a single letter:
- The size of the contract (also known as the Trading Unit) is the unit of measurement in which it is transacted. The following are some of the most common abbreviations you’ll come across:
- The lowest permissible increment of price movement for a contract is called the tick value.
- Margin Maintenance is the required minimum amount of equity in a margin account.
Are futures contracts uniform?
Unlike forward contracts, futures contracts are standardized. Forwards are similar to futures contracts in that they lock in a future price in the present, but they are traded over-the-counter (OTC) and feature terms that can be customized by the counterparties.
What do you mean when you say futures? Can you explain the elements that influence the price of future contracts?
What Are Futures and How Do They Work? Futures are financial derivatives that bind the parties to trade an item at a fixed price and date in the future. Regardless of the prevailing market price at the expiration date, the buyer or seller must purchase or sell the underlying asset at the predetermined price.
What is the cost of futures contracts?
- Derivatives are financial contracts whose prices are derived from an underlying asset or security and are used for a number of purposes.
- The fair value or price of a derivative is computed differently depending on the type of derivative.
- Futures contracts are priced using the spot price plus a basis, whereas options are valued using the time to expiration, volatility, and strike price.
- Swaps are valued by equating the present value of a fixed and variable stream of cash flows throughout the contract’s maturity period.
What are the different types of specifications?
Prescriptive specifications, performance specifications, and proprietary specifications are the three categories of construction specifications commonly encountered in contracts.