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Futures Contract Specifications

Understanding futures contract specifications, sizes and values

Futures contract specifications are the standardized terms that define exactly what you're trading, including the asset type, contract size, delivery location, and expiration date. Unlike stocks where you can buy any number of shares, every futures contract has precise specifications that determine your capital requirements, profit/loss calculations, and risk exposure.

What Are Futures Contract Specifications?

Every futures contract has four critical components that never change:

1. Underlying Asset: What you're trading (crude oil, S&P 500 index, gold) 2. Contract Size: The exact quantity (1,000 barrels, $50 per point, 100 ounces, bushesls, etc) 3. Delivery Location: Where physical settlement occurs (if applicable) 4. Expiration Date: When the contract expires and must be settled

Key Point: These specifications are standardized by exchanges to ensure all traders know exactly what they're buying or selling, creating a fair and transparent marketplace.

How Do Contract Specifications Work?

Understanding Contract Size and Value

Contract Size determines how much of the underlying asset one contract represents. This directly impacts your profit, loss, and margin requirements.

Simple Calculation Example: If the E-mini S&P 500 trades at 6,000 points:

  • Contract Size: $50 per index point
  • Contract Value: 4,800 × $50 = $300,000
  • Tick Size: 0.25 points
  • Tick Value: 0.25 × $50 = $12.50 per tick

This means you control $300,000 worth of stock market exposure, and each quarter-point move equals $12.50 profit or loss.

Margin vs. Contract Value

Critical Distinction: You don't pay the full contract value upfront. Instead, you post margin (typically 5-15% of contract value) as a good faith deposit.

Example:

  • E-mini S&P 500 contract value: $300,000
  • Typical margin requirement: $20,000
  • Leverage created: 1:15 

Access competitive day trading margins through Optimus Futures, with requirements as low as $50 for micro contracts.

What Makes Contract Specifications Unique?

Standardization Creates Liquidity

Unlike custom agreements, standardized specifications mean:

  • All traders see identical contract terms
  • Easy entry and exit from positions
  • Transparent pricing for everyone
  • High liquidity in major contracts (equity indicies, etc). 

Tick Size Determines Precision

Tick Size is the minimum price movement allowed:

  • E-mini S&P 500: 0.25 points
  • Crude Oil: $0.01 per barrel
  • Gold: $0.10 per ounce

Why It Matters: Smaller tick sizes allow more precise entry and exit prices, while larger ticks mean bigger minimum profit/loss increments.

Who Needs to Understand Contract Specifications?

New Futures Traders

Before trading any contract:

  • Understand the exact contract size you're trading
  • Know the tick value for profit/loss calculations
  • Verify margin requirements for your account size
  • Check if physical delivery is possible

Portfolio Hedgers

Example: Portfolio manager with $1,000,000 in stocks needs to know:

  • E-mini S&P 500 contract represents ~$3000,00 exposure
  • Requires 2-3 contracts for an effective hedge
  • Each 1% market move = ~$2,400-3,600 hedge value

Commercial Users

Real-World Application: Airline hedging fuel costs needs to understand:

  • Crude oil contract = 1,000 barrels
  • Jet fuel consumption vs. crude oil correlation
  • Delivery locations and timing requirements

What Do Traders Need to Know About Major Contracts?

Stock Index Futures

E-mini S&P 500 (ES)

  • Contract Size: $50 × S&P 500 index value
  • Tick Value: $12.50 per 0.25 point move
  • Best For: Day trading, portfolio hedging

Micro E-mini S&P 500 (MES)

  • Contract Size: $5 × S&P 500 index value (1/10th of ES)
  • Tick Value: $1.25 per 0.25 point move
  • Ideal For: Practicing futures mechanics, precision position sizing

E-mini NASDAQ-100 (NQ)

  • Contract Size: $20 × NASDAQ-100 index value
  • Tick Value: $5.00 per 0.25 point move
  • Best For: Tech-focused traders, higher volatility plays

Micro E-mini NASDAQ-100 (MNQ)

  • Contract Size: $2 × NASDAQ-100 index value (1/10th of NQ)
  • Tick Value: $0.50 per 0.25 point move
  • Ideal For: Building experience with tech sector volatility, scaling into positions

Energy Futures

Crude Oil (CL)

  • Contract Size: 1,000 barrels
  • Tick Value: $10.00 per $0.01 move
  • Characteristics: High volatility, global economic sensitivity

Micro WTI Crude Oil (MCL)

  • Contract Size: 100 barrels (1/10th of CL)
  • Tick Value: $1.00 per $0.01 move

Metals Futures

Gold (GC)

  • Contract Size: 100 troy ounces
  • Tick Value: $10.00 per $0.10 move
  • Popular For: Inflation hedging, safe-haven trading

Micro Gold (MGC)

  • Contract Size: 10 troy ounces (1/10th of GC)
  • Tick Value: $1.00 per $0.10 move
  • Ideal For: Developing precious metals trading strategies, risk management practice

Learn more about settlement in our Delivery and Settlement Process guide.

Frequently Asked Questions

How do I calculate my profit or loss?

Multiply the price movement (in ticks) by the tick value, then by the number of contracts. For example: 10 ticks × $12.50 tick value × 2 contracts = $250 profit/loss.

What's the difference between contract value and margin?

Contract value is the full worth of what you're controlling ($300,00 for ES at 6,000). Margin is your required deposit (often $12,000-15,000). The difference creates leverage.

Can I trade fractional contracts?

No, futures contracts cannot be split. You must trade whole contracts. This is why micro contracts exist—to provide smaller position sizes for better risk management.

Which contract size should I start with?

Most beginners should start with micro contracts to learn mechanics with lower risk. They offer the same market exposure as regular contracts but at 1/10th the size and capital requirements.

How do I know if a contract requires physical delivery?

Check the contract specifications with your broker or exchange. Financial futures (like ES) are cash-settled automatically. Physical commodities may require delivery arrangements, though most traders close positions before expiration. Brokers at Optimus Futures may help you with the specifics dates. 

Do all contracts have the same tick values?

No, tick values vary significantly between contracts. This affects how quickly profits and losses accumulate. Understanding tick values is crucial for proper position sizing and risk management. 

Where can I find current contract specifications?

Professional trading platforms display current specifications for all contracts. Optimus Futures provides comprehensive specification data through platforms like Optimus Flow and integrated market data.

How do margin requirements relate to contract specifications?

Margin requirements are set as a percentage of contract value and can change based on market volatility. Competitive margin rates help maximize capital efficiency while maintaining proper risk management.

What makes Optimus Futures different for understanding specifications?

Optimus Futures provides clear specification displays, educational resources, competitive commission rates, and access to both micro and standard contracts. Our platform integration helps traders easily understand and compare different contract specifications before trading.

Risk Disclosure: Understanding contract specifications helps manage risk but doesn't eliminate it. The high degree of leverage in futures can work against you as well as for you. Past performance is not indicative of future results.

Next Steps in Your Futures Education

Master the Fundamentals:

  1. ✅ Contract specifications (covered in this article)
  2. Contract basics → What are Futures Contracts?
  3. Value calculations → Understanding Futures Margins

Apply Your Knowledge:

  1. Position sizing → Position Sizing Principles
  2. Market selection → Stock Index Futures
  3. Risk management → Understanding Futures Risk

Develop Trading Skills:

Ready to Start? Open an account and practice with micro contracts to experience different contract specifications.

Risk Disclaimer

The content of this guide is the opinion of Optimus Futures. 

Futures and options trading involves substantial risk and is not suitable for all investors. Past performance is not necessarily indicative of future results. Examples provided are for illustrative and educational purposes only and should not be construed as specific trading advice or recommendations.

Trading on margin and with leverage carries a high level of risk, as it can amplify both gains and losses. 

The placement of contingent orders such as "stop-loss" or "stop-limit" orders will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders. Risk management techniques discussed (such as stops, stop-limits, or bracket orders) cannot eliminate risk.

You should only trade with risk capital—that is, money you can afford to lose without affecting your lifestyle or financial security. There are no “proven” methods or guaranteed systems for making money in futures trading. It is a challenging process that requires ongoing learning, discipline, and adapting to changing market conditions. Traders must carefully consider their financial condition, risk tolerance, and trading objectives before engaging in futures or leveraged markets. It is important to note that most traders do lose money trading futures.