Question

Which term represents the amount of asset that must be delivered under one futures contract?

• A. Basis
• B. Contract cycle
• C. Contract size
• D. Expiry date

Hint:

Contract size defines how much of the underlying asset is represented in one futures contract.

Answer 1

The Correct Option is C

In futures trading, the contract size refers to the standardized quantity of the underlying asset that must be delivered or settled under one futures contract.
For example, a futures contract on gold might specify a contract size of 1 kilogram, meaning that each contract represents 1 kg of gold.
Explanation of Other Options:

(A) Basis: The difference between the spot price and futures price of an asset.
(B) Contract cycle: The time period or months during which futures contracts expire.
(D) Expiry date: The date on which the futures contract expires.
Therefore, option (C) correctly identifies the amount of asset per futures contract.