Business, Legal & Accounting Glossary
Contract size is the deliverable amount on a contract. The quantity of goods or commodities deliverable on any future, forward or option contract is, then, the contract size. IMM contract size for the British pound is 62,500 British pound sterling, IMM contract size for the euro is 125,000 euros, and IMM contract size for the yen is 12.5 million yen. Contract size varies in measurement units. The contract size for gold on the COMEX is 100 oz (ounces); the contract size for soybeans on the CBOT is 5K BU (bushels), and contract size for brent crude on the NYMEX is 1,000bb (barrels). Not all contracts including a contract size settle in actual delivery, but contract size is specified anyway even if the closest deliverable or cash settles the contract. This is because uniform contract size allows goods and commodities and options to trade in standardized market form. Contract size is, then, what allows massive bulk trading in commodities and options on global exchanges.
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This glossary post was last updated: 4th February, 2020 | 10 Views.