Contract Size

Dictionary Says

Definition of 'Contract Size'

The deliverable quantity of goods or commodities underlying futures, forward and option contracts.
Investopedia Says

Investopedia explains 'Contract Size'

Each contract will have a well defined contract size. For example, most equity options have a contract size of 100 shares. So, if the option is exercised, 100 shares of the underlying company must be transferred between the option holder and writer.

Related Definitions

  • Aggregate Exercise Price

    The strike price of a put or call option multiplied by its contract size. Aggregate exercise prices are used to determine the dollar amount required should the option be exercised.
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  • Call

    1. The period of time between the opening and closing of some future markets wherein the prices are established through an auction process.2. An option contract giving the owner the ...
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  • Exercise

    When a stockholder takes advantage of a privilege offered by a company or other financial institution. This includes warrants, options and other exotic financial instruments.
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    • Forward Contract

      A cash market transaction in which delivery of the commodity is deferred until after the contract has been made. Although the delivery is made in the future, the price is determined on ...
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    • Futures Contract

      A contractual agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a pre-determined price in the future. ...
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    • Option

      A financial derivative that represents a contract sold by one party (option writer) to another party (option holder). The contract offers the buyer the right, but not the obligation, to ...
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    • Put

      An option contract giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time. The buyer of a put option ...
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    • Strike Price

      The price at which a specific derivative contract can be exercised. Strike prices is mostly used to describe stock and index options, in which strike prices are fixed in the contract. ...
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    • Underlying

      1. In derivatives, the security that must be delivered when a derivative contract, such as a put or call option, is exercised. 2. In equities, the common stock that must be delivered ...
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    • Average Daily Trading Volume - ADTV

      The average amount of individual securities traded in a day or over a specified amount of time. Trading activity relates to the liquidity of a security; therefore, when average daily ...
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