Calculate the notional value of a futures contract by multiplying the size of the contract by the price per unit of the commodity represented by the spot price. For example, one soybean contract is comprised of 5,000 bushels of soybeans. At a spot price of $9, the notional value of a soybean futures contract is $45,000. The notional value of a futures contract is the value of the assets underlying the futures contract. The spot price is the current price of the commodity.

Unlike stocks that can exist in perpetuity, futures have an expiration date and are limited in their duration. The front month futures contract is the contract with the nearest expiration date and is usually the closest in value to the spot price. The price of the front month futures contract may be substantially different than the contract a few months out. This allows the market to attempt to predict supply and demand for a commodity further out. There are two main participants in the futures markets: hedgers are seeking to manage their price risk for commodities, and speculators want to profit off of price fluctuations for commodities. Speculators provide a great deal of liquidity to the futures markets. Futures contracts allow speculators to take larger amounts of risk with less capital due to the high degree of leverage involved.

Futures contracts are financial derivatives with values based on an underlying asset. They are traded on centralized exchanges such as the CME Group or the ICE Exchange. The futures market began in the 1850s in Chicago with farmers seeking to hedge their crop production. Farmers could sell futures contracts to lock in a price for their crops. This allowed them to be unconcerned about daily price fluctuations of the spot price. The futures market has since expanded to include other commodities, such as energy futures, interest rate futures and currency futures.