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Contract Unit

What does Contract Unit mean?

Each future contact has a specific quantity of underlying assets that shows the actual quantity of that asset. The asset can be anything that are traded on future exchange such as agriculture products, stocks, currency etc. Over the period contracts has become standard and specific units are pre-defined.

Futures Knowledge Explains Contract Unit

Contract unit is also known as a trading unit. Different commodities have different contract size. . For example, Gold futures are traded in units of 1000 grams (32.15 troy ounces), while contract unit for Brent is 1,000 barrels. The standardized contract units help the investors to decide on the exact number of contract unit they need to take while entering into such contracts. 

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