Now that you’re trading commodities, you’ll need to understand how commodity futures contract specifications work. Unlike stocks, you don’t trade shares. Instead, you trade in contracts. These contracts have sizes, based on the futures exchange’s requirements. It’s important to know these rules, especially if you want to become a successful commodities trader and also to preserve your money.

Understanding futures contract specifications can seem overwhelming. However, it need not be. Thanks to the Internet, you can find valuable resources. Here are ways to gain information on commodity futures contract specifications:

1. Rely on investment educational resources to get information about commodity futures contract specifications.

2. Use online futures traders to get commodity futures contract specifications.

3. Utilize indices for futures contract specifications.

Action Steps
The best contacts and resources to help you get it done

Use investment educational resources to know about commodity futures contract specifications

Since you're new to commodities, you should first consider going with online investment educational resources. Use these resources to understand how certain contracts for commodity futures expire. It's important to know information such as the delivery date or commodity futures contract specifications.

I recommend: Commodity Almanac is a great resource for understanding contract specifications for commodity futures. It not only explains in detail how these work, but the website provides examples. Learn-Futures is another website to refer to. The website not only shows the commodity futures contract specs, but it provides information on price movements.

Get commodity futures contract specifications through online futures traders

After you have become familiar with how commodities contract specifications work, next visit websites that show this actual information. Online commodity future trading firms provide information such as the type of commodity, its symbol, trading hours, contract months and sizes. If you're ready to start trading, you can open an account.

I recommend: PFGBEST offers futures contracts specifications. This company is one of the largest non-clearing U.S. futures companies, with brokerage firms in more than 80 countries. Cannon Trading is also another website to check for settlement of commodity future contracts. Cannon Trading not only will tell you the type of commodity, but the exchange it trades on.

Obtain futures contract specifications from indices

Going to an index's website should be one of your first steps. After all, this is where the commodity trades. The index's website shows the contract listing, the hours it trades, and the point descriptions. Not only can you get quotes here, but you can also study charts for the commodity's price movement.

I recommend: Chicago Mercantile Exchange shows specs for commodity futures. Refer to its educational section on commodities. Chicago Board of Trade also provides commodity futures contract specifications. You can get information such as contract sizes, price quotes, and contract months.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Memorize the commodity futures contract specifications before you start trading futures or commodities. Not knowing these rules can result in major mistakes, which can end up costing you a great deal of money.