Futures Contract Specifications Explained
Written by Greg, founder of FTMarketWatch — a former licensed commodities trader.
Last reviewed: September 2, 2026
A futures contract is standardized, but every market has its own specifications. Before trading a contract, you need to know exactly what one contract represents and how much each price move is worth.
The main contract specifications
| Specification | What it tells you |
|---|---|
| Contract size | How much of the underlying asset one contract represents. |
| Notional value | The market value represented by the full contract. |
| Tick size | The smallest permitted price movement. |
| Tick value | The dollar gain or loss from one tick. |
| Contract month | The month in which the contract expires or settles. |
| Settlement | Whether the contract is cash-settled or can result in delivery. |
A simple tick-value example
Suppose a contract represents 1,000 units of an underlying commodity and the minimum price movement is $0.01 per unit. One tick is worth $10: 1,000 × $0.01.
A 12-tick adverse move would therefore create a $120 loss per contract. This is why the contract specification matters more than the screen price alone.
Notional value is not the same as margin
The notional value describes the exposure represented by the contract. Margin is the collateral required to hold the position. A trader may post only a fraction of the notional value, which creates leverage.
Why expiration matters
Futures expire. Traders who do not intend to settle or make/take delivery generally close or roll positions before the relevant deadline. The exact rules differ by contract, so the exchange's current specification page should always be checked.
Sources and further reading
Primary sources are listed so you can check the rules and terminology directly.
- CFTC Futures Market Basics — futures basics and risk
- CME Group contract specifications — examples of contract size, tick size and settlement