Each futures contract will be comprised of a different set of specifications that set the terms for how that product will trade. It is important that you know this information before trading.
Here are the different components of contract specifications:
Contract symbol - Each contract will have a unique base symbol that distinguishes it from other products.
For example, the base symbol for the E-Mini S&P 500 is ES and the base symbol for the E-Mini NASDAQ 100 is NQ.
Exchange – The same product can be listed on multiple exchanges, so each contract will have a particular exchange associated to it that lists that particular contract.
For example, WTI crude oil is traded on CME Group’s NYMEX exchange with the contract symbol CL and WTI crude oil is also traded on ICE’s ICE Futures US exchange with the contract symbol WBS.
Contract size – Each contract will have a standard size associated to it and, when combined with price, will define the contract or notional value.
For example, the full-sized crude oil contract size on CME Group’s NYMEX exchange is 1,000 barrels and, when the price of crude oil is $100, each contract has a value of $100,000.
Months – Each contract will have a set of expiration months in which the contract will be listed and traded.
For example, the E-Mini S&P 500 contract has quarterly contract maturities, meaning that the contract trades in March, June, September, and December months only for a given year. While some contracts are listed in quarterly expirations, other contracts, such as crude oil, have every month of given year listed and others have additional expiration listings called serial months that are listed in between quarterly expirations.
Tick size – The minimum increment of price fluctuation is defined as a tick and each contact has an associated tick size and value for each tick.
For example, the E-Mini S&P 500 contract has a tick size of a quarter of an index point, meaning that the contract trades in 0.25 increments, and each tick is worth $12.50.
While ticks refer to the minimum price increment change, points refer to minimum whole number increment of price fluctuation and will be comprised of multiple ticks. For example, a point for the E-Mini S&P 500 is 1.00 and can be demonstrated by the index rising in price from 1800.00 to 1801.00, whereas, a tick increase would be represented by the index rising from 1800.00 to 1800.25. Since the tick value is $12.50 and the tick size is 0.25 index points, a point value equals $50.00.