Futures contracts specify:

1. The currency in which the futures contract is quoted.
2. The grade or quality of the deliverable.
3. Pricing point — the location where delivery must be made.
4. The delivery month.
5. The last trading date.
6. The underlying asset.
7. The type of settlement, either cash settlement or physical settlement.
8. The amount and units of the underlying asset per contract.

The value of futures trading information is ultimately tied to the underlying product or instrument (e.g., S&P 500 Index, gold, crude oil, U.S. Treasury bonds or notes, soybeans, etc.) via each contract’s specifications. You can either buy (go long) or sell (go short) any futures contract and your risk (or potential profit) is virtually unlimited.

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