Phase 1 - Lesson 3 Vocabulary
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11 Terms
Contract Specifications
The standardized rules that define how a futures contract operates.
Tick
The smallest allowable price movement in a futures contract.
Tick Size
The minimum amount the price can move.
Tick Value
The dollar value of one tick movement.
Point
One full unit of price movement.
Contract Size
The amount of the underlying asset represented by one futures contract.
Minimum Price Fluctuation
Another term for the smallest allowed price movement (tick size).
Q: What is a tick?
A: The smallest allowable price movement in a futures contract.
Q: What is tick value?
A: The amount of money one tick movement is worth.
Q: What is a point?
A: One full unit of price movement.
Q: Why are contract specifications important?
A: They define how a futures contract works and allow traders to calculate risk accurately.