Options & Derivatives
A futures contract defines delivery or cash settlement on set terms
A futures contract is a standardized agreement traded on a regulated venue to buy or sell an underlying exposure under specified terms at a future date. Contracts differ by underlying, multiplier, tick size, expiration cycle and whether they settle in cash or through delivery.
Explainer Reviewed 08-21-2026
What it is for
Contract specifications let a reader translate a quoted move into exposure and understand why a futures price is not the same object as a spot price or an index level. Margin supports the position but is not the full economic exposure.
What it cannot tell you
A small margin deposit does not cap loss. Positions are marked to market and can generate variation-margin calls. Contracts expire and may require rolling or settlement. This guide prints no futures price and recommends no position.
How to verify the object
Open the exchange’s current contract specification and rulebook. Confirm the contract month, multiplier, tick, trading hours, last trading day and settlement method. Read the broker’s margin and liquidation disclosures separately.
Further reading
Recommended reading
Independent bookstore picks via Bookshop.org. Education first — not a shopping mall.
Recommended reading
Options as a Strategic Investment
5th edition
- Why
- Comprehensive options strategies and risk framing beyond a first options primer.
- Best for
- Readers who already finished options-basics.
- Limitation
- Not a recommendation to trade options; leverage can produce losses beyond premiums.
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Education only. Not individualized advice.