Contract Size

Posted in Finance, Accounting and Economics Terms, Total Reads: 431
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Definition: Contract Size

Contract size or lot size represents a specific quantity of a commodity which is to be delivered according to the futures contract or agreement. The commodity may be stock, futures or options. Generally the contract size is standard for futures and options but may vary depending upon the commodity or agreement.


For example: contract size for options is generally 100 shares but contract size for gold on COMEX is 100 ounces.


Contract size determines the change in dollar value of a unit change in the underlying commodity. His can be explained by giving an example. Suppose the price of gold changes by 1$, therefor there will be 100$ change (as lot size is 100 ounces) in the gold contract.


In Forex, contract size is the amount of currency being bought and sold. There are two types of contract sizes here:-

• Standard contract size : 100,000 base currency units

• Mini contract size: 10,000 base currency units.


Similarly for every commonly traded quantity a contract size is specified.

 

Commodity

Contract size

Grains and Oilseeds

Wheat

5,000 bu

Corn

5,000 bu

Soybeans

5,000 bu

Soybean meal

100 tons

Soybean oil

60,000 lb

Livestock and Meat

Cattle (feeder)

50,000 lb

Cattle (live)

40,000 lb

Hogs (lean)

40,000 lb

Pork bellies

40,000 lb

Food and Fiber

Cocoa

100 metric tons

Coffee

37,500 lb

Sugar

112,000 lb

Cotton

50,000 lb

Orange Juice

15,000 lb

Metals and Petroleum

Copper

25,000 lb

Gold

100 troy oz

Silver

5,000 troy oz

Crude oil (light sweet)

100 bbl

Heating oil

42,000 gal

Gasoline

42,000 lb

Interest Rates

Treasury bonds

$100,000

Treasury bills

$1,000,000


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