Futures Contract Specifications: Size, Tick, Multiplier and Months

Before you read: What You Can Trade: Stocks, ETFs, Futures and Options

What you will learn

• What each line of a futures contract specification means and why it is there.
• How the multiplier, tick size and tick value fit together, and how to check one against the others.
• How to work out the notional value of one contract, and why that number matters more than the margin deposit.

Why does a contract need a specification?

If two strangers agree to trade something months from now, what would they need to pin down first?

A futures contract is a standardized agreement to buy or sell a set amount of something at a price agreed today, for settlement on a later date. “Standardized” is the key word. Every contract of the same product and month is identical, so any buyer can trade with any seller through the exchange, and a clearinghouse stands between them. The contract specification, often shortened to “contract specs,” is the rulebook entry that fixes those identical terms: what is traded, how much of it, in what price steps, during which hours, in which months, and how it settles.

Because everything is fixed in advance, two traders never need to negotiate size or delivery terms. They only agree on price and on the number of contracts.

What are the main fields?

Which fields tell you what you own, and which tell you how money changes hands?

Most specification pages list the same core fields, even across very different products:

• Underlying. What the contract is based on: a stock index, a commodity such as crude oil or gold, an interest-rate instrument or a currency.
• Contract unit or multiplier. How much of the underlying one contract represents. For an index future this is a dollar amount per index point, such as $20 × the index. For a commodity it is a physical quantity, such as 1,000 barrels or 100 troy ounces.
• Price quotation. The units the price is shown in: index points, dollars and cents per barrel, dollars per ounce.
• Minimum price fluctuation (tick). The smallest step the price can move, and what that step is worth for one contract.
• Trading hours. When the contract trades electronically, including any daily maintenance break.
• Listed contract months. Which delivery months exist, often shown with one-letter month codes.
• Settlement method. Whether the contract ends with a cash payment (cash settlement) or with delivery of the underlying (physical delivery).
• Termination of trading. The last day and time the expiring month can be traded.
• Price limits. Rules that pause or cap trading after very large moves, where a product has them.

How do multiplier, tick size and tick value relate?

If you know any two of these three numbers, can you work out the third?

The three numbers are linked by one line of arithmetic:

Tick value = tick size × multiplier

Take a fictional index contract with a multiplier of $20 per point and a tick size of 0.25 point. One tick is worth 0.25 × $20 = $5. One full point is four ticks, or $20. A 10-point move is $200 per contract. The same relation works backward: if a page tells you the tick is 0.25 and worth $5, the point value must be $5 ÷ 0.25 = $20.

This cross-check is worth doing every time you read a specification, in a calculator or on a broker screen. If the three numbers do not agree, one of them has been copied wrongly, and every risk calculation built on it will be wrong too.

Specification diagram

Illustrative diagram constructed for teaching. Not real market data.

The diagram links the fields of a fictional index contract: the multiplier times the tick size gives the tick value, and price times the multiplier gives notional value. It is constructed for teaching and is not real market data.

What is notional value, and why does it matter?

How much of the underlying are you actually exposed to when you hold one contract?

Notional value is the full value of what one contract controls:

Notional value = price × multiplier

For the fictional index contract above, if the index were at 18,000, one contract would control 18,000 × $20 = $360,000 of index exposure. The margin needed to hold that contract is only a fraction of that amount. That gap is the leverage. A 1% move in the index, 180 points in this example, would change the position’s value by $3,600, which can be a large share of the deposit.

Notional value is the honest measure of size. Two positions with the same margin can carry very different exposure, and a position that looks small in margin terms can be large in notional terms.

What are micro contracts?

Why would an exchange list a smaller copy of an existing contract?

Many popular futures have a micro version that tracks the same underlying at a fraction of the size, often one-tenth. The tick size usually stays the same while the multiplier, and so the tick value, shrinks. A micro does not change how the market moves. It changes how much each move is worth to the holder, which lets traders express smaller positions in finer steps. Costs per contract often do not shrink in the same proportion, so fees can take a larger share of each tick on a micro.

What this does not tell you about contract specifications

• Specifications are set by the exchange and can change. The exchange’s own current rulebook is the reference, not this lesson or any third-party page.
• A specification says nothing about whether a product suits you, or about where its price is going.
• Margin requirements are not part of the fixed terms. They are set separately and can change at short notice.
• Your broker may add its own rules, such as earlier cutoffs before expiration or higher margins.

Check yourself

1. A fictional contract has a tick size of 0.10 and a tick value of $5. What is its point value? Hint: tick value divided by tick size.
2. Why is notional value a better measure of position size than the margin deposit? Hint: which number moves with the market?
3. If a micro contract has one-tenth the multiplier of the full-size contract, what happens to the tick value? What stays the same? Hint: compare the two parts of the tick-value formula.

Last reviewed November 8, 2026. Spotted a mistake? Report an error.