CONTRACT SPECIFICATIONS
Plain English
Every futures contract has exact specifications: what you're trading, how much of it, the price increments, and when it expires. You need to know these before you trade — a crude oil contract is 1,000 barrels. One tick the wrong direction can mean hundreds of dollars.
Going deeper
Futures contract specifications define: Underlying Asset (specific commodity, index, or financial instrument), Contract Size (e.g., 1,000 barrels of crude oil, $250 × index value), Tick Size (minimum price fluctuation) and Tick Value (dollar value of one tick), Contract Months (which months the contract expires — monthly, quarterly), Delivery/Settlement (physical vs. cash settled), First Notice Day (when physical delivery notices can be issued), and Last Trading Day. Understanding tick sizes is critical: E-mini S&P 500 has a tick of 0.25 points worth $12.50. Crude oil (CL) has a tick of $0.01 worth $10.
Examples
Crude Oil Contract
CME Crude Oil (CL): Underlying = Light Sweet Crude Oil. Contract size = 1,000 barrels. Tick size = $0.01/barrel. Tick value = $10. A $1 move in oil = $1,000 profit/loss per contract. Monthly expirations. Settlement = Physical (most traders close before delivery).
Micro vs. Standard
E-mini S&P 500 (ES) controls $250 × index value. At 5,000, that's $250,000 per contract. The Micro E-mini (MES) controls $5 × index value — $25,000 at 5,000. MES is 1/10th the size, letting newer traders participate with far less capital at risk.