Contract Specifications, Lot Size & Expiry

What this unit covers

Learn to read the real specifications of a futures contract, lot size, expiry date and tick size, so a contract listing stops looking like jargon.

By the end you will be able to

• Identify lot size, expiry date and tick size on a futures contract listing.
• Explain what each specification tells you: how much, until when, and in what steps.
• Recognise that these specifications are fixed by the exchange, not by the trader.

How it starts: The Fine Print of a Contract

1. You open a futures contract listing before placing an order.
2. You look at the price first and skip the expiry date.
3. The contract nears its last trading day and you never checked when.

Words you will meet

Lot size

The fixed minimum quantity you must trade in one futures contract, set by the exchange.

Expiry date

The fixed date on which a futures contract must be settled or closed.

Tick size

The smallest step by which a contract's price is allowed to move.

In this module: Futures

1. Purpose and Mechanics of Futures
2. Contract Specifications, Lot Size & Expiry (this unit)
3. Margin and Mark-to-Market
4. Basis, Rollover & Settlement