Futures Contract Details
FuturesSponsored Content

Curriculum Content
A futures contract informs you of market expectations. These expectations have been standardized by the futures market to decrease trading difficulty and increase liquidity. Forwards contracts which are not standardized can be customized from OTC dealers, usually corporations and companies trying to hedge in either long or short positions. Note that this list is in alphabetical order. This list does not include all the potential aspects of a futures contract, only the major focus points.
Commodity Quality
Contracts will state the required quality level of goods delivered. Only commodities which trade in grades will have this requirement. Some quality levels may not be substituted unless explicitly stated in the contract. If a substitution is made for a lower grade good, a reduction from the delivery price will be paid. Commodities without quality grades and financial futures don’t suffer from this issue.
Commodity Quantity
The delivery amount specifies the quantity of underlying assets that must be delivered. There are multiple ways this may be stated. Contracts usually state the quantity amount in units. For certain commodities they may alternatively state the amount in weight.
Delivery Date
The delivery date is the day parties are obligated to deliver their side of the deal. The contract specifies the date, month, and year of delivery. The long position must deliver the currency payment on the delivery date. The short party must deliver the commodities discussed in Commodity Quality.
Expiration
Futures contracts will cease to trade after the Expiry date. The final price of the contract is also set on this day. The expiration date after the current expiry becomes the nearest date. Traders will begin to trade with the new date in mind. If you’re long on the contract you may have a few options after this occurs. You can take the profit or loss in cash, take direct delivery of the commodities, or roll the contract over by purchasing another contract expiring at the new expiration date.
Position Limits
Limitations to future positions typically occur in one of two ways, and a position limit is one of them. An exchange can limit the amount of contracts held in a position within a single day. If you’re a buyer, you won’t be able to hold futures contracts above this number. This number exists to prevent speculators from buying or selling so many contracts that they can monopolize or control the market.
Price Limits
The second of the two limitations is price limits. Price limitations create a maximum and minimum movement to daily price values. If trading prices hit the upper or lower limit, the contract’s price movement is halted. This stops the market from crashing or rising too far, forcibly calming the market. The next day, or after a period of days, trading on the contract will resume. As futures approach their expiration date, price limits may be lifted. Speculators may simply stop trading the contract after price limits occur, waiting for prices to rise or fall to the natural level.
Settlement Requirements
The settlement requirements specify how, when, and where underlying commodities must be delivered to fulfill a contract’s requirements. If a cash settlement can be delivered to satisfy contract requirements, the amount will be stated here. If alternative commodity quality grades can be substituted to satisfy requirements, those amounts will also be stated here.
Did we help you? Vote with a Crypto-Donation!
Visit on Steemit!
Support us on Steemit!

Donate Bitcoin
141FSmuHkMSZVsQQtE9GHSPyj6gAonqqWR

Donate Dash
Xr4fdtP78Mh3gnVwAUjjuZRCq3kubaHZ5o

Donate Litecoin
LcrxGsshB2j9SddnZNdLfYMsDqAtw3Dr9v

Donate Iota
LXIVNBVHRYBOHRWNGMBNHOYMT9GBEFTPQMKDUZUYYHGMPXOOEYETMUQZXWXCGWBMTFERLW9LMCKNUDCKAMDOQCNDNZ
Visit on D.Tube!
Support us on D.Tube!

Donate Bitcoin Cash
14NCVeGCZfHf7tiy9N2Yz1mrBNi9m2mQ4S

Donate Ethereum
0xAF7d66B09F34833Ccec1Ed9e4D356D40c09698e5

Donate Ripple
raiZ2rCXLeBTUh2A4voKALZpMxQ88KxZxm

Donate Monero
42byh9AjzB3XXRptSeSfzAGC588HRZgVXAGMay6yYKjjAHinUxdQkxw3Ay1XcziXV86XY57aRqG5kGnJ8LFWmSjmAnUEnYh
International Economic Analysis:
- Major Currency Economic Summaries
- Performance of Major Imports and Exports
- Mandates of Central Banks versus Expectations
- Performance Indexes of Major Economies
- Economically Correlated Currency Projections
- Large Funds Currency Sentiment Readings
- List of Technical Indicators to Look For
- Occasional: Foregin Exchange Technicals Markups
American Markets Analysis:
- Summaries of American Economic Structure
- Performance of Major
- Imports/Exports
- Federal Reserve Mandate versus Expectations
- Performance Indexes of U.S Economy
- Economically Correlated U.S Dollar Projections
- Large Trading Fund Index Sentiment Readings
- Market Wide Earnings Versus Valuations
- Fundamental Ranking of U.S Business Sectors
- Best and Worst Future Consensus Estimates
- Occasional: Firm Fundamental Strength Report
- List of Technicals to Look for While Trading
Storefront
Investment and Finance, Serviced by Amazon
No Results Found
The page you requested could not be found. Try refining your search, or use the navigation above to locate the post.