Definition
In futures trading, the standardized amount of the underlying commodity or financial instrument is represented by a single contract.
Example
- Corn futures: 5,000 bushels per contract
- Crude Oil futures: 1,000 barrels per contract
- E-mini S&P 500 futures: $50 x index value
Key Points
- Value per Tick: Contract size determines the dollar value of each minimum price fluctuation (tick) of the futures contract.
- Risk Management: Understanding contract size is crucial for calculating trade risk and appropriate position sizing.
