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How to calculate price of a contract?


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  #1 (permalink)
jirakst
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Hello,

I am new to futures and after some months on stocks trading I'd like to begin with corn.
I've spend some time by studying arcticles and a few books and I'd like to ask if I understand correctly followings:
XNU2015
price: 4.34
size: 1000
tick: 1/8 cent
margin: 242
it means after paying 242$ I control contract of overall value 4.34*1000$.
If it moves to 4.4, the profit is 0.06*1000$.

Why I see on my broker's page price 4.3425 while at TradingView is decimal-shifted to 434.6?
Thanks in advance a lot!


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  #3 (permalink)
jirakst
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Any help would be appreciate.
Thanks!


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  #4 (permalink)
 
furytrader's Avatar
 furytrader 
Lake Forest, IL USA
 
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Which corn contract are you referencing?

For the Chicago Board of Trade's corn contract, the specs are:

Priced in terms of cents per bushel
Futures are priced in 1/8s of a cent

1 contract = 5,000 bushels
1 cent move for 1 contract = $.01 x 5,000 = $50.00

Current front month = Dec 15 (CZ15)
Current price = 448-6 = 448 + 6/8 (remember, priced in 1/8s) = 448.75

Current initial margin = $1,250

Does that help?


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  #5 (permalink)
jirakst
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Yes, thank you.
What is the overall price of the contract? I would say it is 4.48*5000$ but why it is there 448?


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  #6 (permalink)
 
furytrader's Avatar
 furytrader 
Lake Forest, IL USA
 
Experience: Intermediate
Platform: MultiCharts + CTS T4
Broker: Advantage Futures, IQFeed.net
Trading: YM, ES, EU, US, S
Posts: 153 since Jun 2011
Thanks Given: 109
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The "notional" value of the contract would be 448.75 cents per bushel x 5000 bushels = $22,437.50.

448 is CENTS per bushel = $4.48 dollars per bushel


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  #7 (permalink)
jirakst
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You really helped me, thank you very much.


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Last Updated on July 14, 2015


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