Futures contract sizes

[Hend Abuenein]

Hi,
In one of your questions you say that "it is not uncommon for GARP to assume that we know" a few of the futures contract sizes, such that the size won't be stated in the question.

Other than :
A US T-bond future=$100,000 face value
Gold futures = 100 troy ounces
Silver futures = 5,000 ounces

What else are we expected to know?

Thanks

 

[David Harper CFA FRM]

Hi Hend,

I'm less certain, going forward, that GARP expects you to know futures contract sizes. As of today, I would expect them to give you the contract size specifications. However, in case they don't I do think it's probably good to know the following (sorted in order of importance based merely on my opinion, based on my experience with the exam):

• Treasury bonds: $100,000 (GARP is likely to expect you to know this. I would not expect this to be stated)
• S&P 500: $250 * index futures price (popularly used for questions)
• Gold: 100 troy ounces (I agree with you)
• Eurodollar: $1,000,000
• NASDAQ 100: $100 * index futures price
• S&P & NASDAQ MINI contracts: one-fifth (1/5th); i.e., $50 * and $20 * (conceivable test questions since they have tenure in the Hull)

These three are "good to know" if you want to be safe, but I would be expect GARP to remind you rather than assume you know:

• Crude oil: 1,000 barrels
• Silver: 5,000 ounces (maybe, do most people know this? I don't think so....)
• Corn (= wheat): 5,000 bushels (popular in quizzes)
• Copper: 25,000 pounds

Where can you find these? http://www.cmegroup.com/
e.g., http://www.cmegroup.com/trading/metals/base/copper_contract_specifications.html

These are the usual suspects and, I think, cover the assignments with the exception of commodities that, almost certainly, would need to be specified (i.e, natural gas, electricity, heating oil). I hope that helps, thanks, David

 

[Hend Abuenein]

You also stated in the answer to a question (not in question itself) that copper futures were for 25,000 pounds each.

Thanks

 

[David Harper CFA FRM]

Hi Hend, I forgot copper. Yes, i guess i would add that to the "nice to know list" (I can't imagine GARP expecting us to know that). thanks! David

 

[GEBEN9829]

Good Morning David,

Does these specifications still worth mastery before appearing to the exam?

 

[David Harper CFA FRM]

HI @GEBEN9829 Lately the exam has been giving the contract sizes in any futures contract question; and I continue to believe that a good question provides the assumption so you don't need to memorize. However, among my original list over a decade ago (yikes!)

• Treasury bonds: $100,000 (GARP is likely to expect you to know this. I would not expect this to be stated)
• S&P 500: $250 * index futures price (popularly used for questions)
• Gold: 100 troy ounces (I agree with you)
• Eurodollar: $1,000,000
• NASDAQ 100: $100 * index futures price
• S&P & NASDAQ MINI contracts: one-fifth (1/5th); i.e., $50 * and $20 * (conceivable test questions since they have tenure in the Hull)

Just to be "safe," I'd still recommend knowing these (I can't imagine they wouldn't today give you the size of gold futures), approximately in order of utilization:

• Treasury bonds: $100,000 (GARP is likely to expect you to know this. I would not expect this to be stated)
• Eurodollar: $1,000,000
• S&P 500: $250 * index futures price (popularly used for questions)
• NASDAQ 100: $100 * index futures price
• S&P & NASDAQ MINI contracts: one-fifth (1/5th); i.e., $50 and $20

This is just my opinion. Others might disagree. I hope that's helpful