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Trading 101: Understanding Futures Contracts Specifications


Understanding how to read and interpret futures contracts specifications is an important part of getting started in the market. A contract’s specifications spell out its parameters in concrete terms. If you’re not familiar with a product’s specs, then you shouldn’t be trading it!

The Ins and Outs of Futures Contracts Specifications

No matter the exchange, a standardized futures contract includes a collection of unique specifications. These guidelines govern distinct elements of the contract, including quantity, expiration, delivery procedures, and price quotations.

Exact futures contracts specifications vary from product to product. However, several elements are typically found across a wide variety of asset classes. Let’s take a look at a few of the most common.

Contract Basics

In futures, each standardized contract includes several elementary specifications:

  • Symbol: Each product has a designated symbol, which is then combined with individual codes representing calendar month and year. For example, December 2019 corn futures are listed for trade on the CME Globex as “ZCZ9.” This notation includes the base symbol of ZC, followed by a “Z” for December, and “9” for the year 2019.
  • Trading hours: Session opening and closing times vary according to a variety of factors, including asset class and related markets. Each product’s business hours are listed in its specs.
  • Expiry: A contract’s expiration date is given to signify when it will cease to be traded.
  • Settlement: Either physical delivery or financial adjustment is designated for each contract’s settlement.


The contract unit is used to determine the quantity of the underlying asset upon which it’s based. This is a key element of the contract’s aggregate value because it’s used to calculate margin requirements and pricing. Generally speaking, if a contract has a large quantity or size, then it’s capital intensive; if small, the money required to trade it is minimal.

Quantities vary from product to product. For instance, the West Texas Intermediate (WTI) crude oil futures contract has a quantity of 1,000 barrels. By comparison, E-mini crude oil futures feature a unit of 500 barrels, exactly half the size. This difference influences how much capital you need to trade each product with respect to brokerage margin requirements.

Price Quotation

How a contract is priced is a key element of its tradability. For example, U.S.-based commodities are priced in terms of U.S. dollars and cents. However, the increment of pricing may be per bushel, barrel, or ounce, depending upon how the asset in question is counted.

In addition, when trading international currencies or equities indices, pricing modules do vary. When engaging overseas markets and index products, it’s imperative to be aware of denomination and how the products are priced.

Minimum Tick

Of all futures contracts specifications, the minimum tick fluctuation is among the most important. It represents the smallest amount by which price moves, directly influencing technical analysis as well as risk management.

Minimum ticks vary wildly from contract to contract. Here are a few of the most popular products listed on the Chicago Mercantile Exchange (CME):

Product Asset Class Minimum Tick
E-mini S&P 500 Equity Index  0.25 index points
10-Year Note  Debt    1/8 of 1/32 of 1 point
WTI Crude Oil Energy $0.01 per barrel
Gold Metal $0.10 per ounce
Corn Agriculture $0.0025 per bushel

Tick Value

A contract’s tick value is a critical aspect of its makeup. It’s the amount of money represented by the minimum tick movement. Tick value is calculated by taking the quantity of the contract and multiplying it by the minimum tick.

Any trades are educational examples only. They do not include commissions and fees.

For instance, the specifications of CME soybean futures state the contract’s size to be 5,000 bushels and the minimum tick to be 0.0025 per bushel. Accordingly, the tick value of soybean futures is $12.50 (5,000 * 0.0025 = 12.50). This means that every time the market moves a single tick, a one contract position either credits or debits the trading account by $12.50.

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