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Memphis,TN
Posts: 232 since Sep 2010
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I swear I'm getting close, to fully understanding the dynamics and the way in which the Futures are calculated and based, and I am asking please, for some clarification to my understanding.....
So, all commodities / Index Futures, are based on a $1 move , it's just that, each Future has it's own worth on a per ...tick, .0001, .00001, .005, .01, .10, etc. move
I am trying to easily convert the worth of each Future , on the basis of what each is worth, via it's worth on a 1/4 , 1/2, 1/8. 1/20 , etc.. of it's 1 Point value
Here is where I found the 1 Point values for each of the Futures...
Futures - [AUTOLINK]Contract[/AUTOLINK] Specifications
If we take CL in this example,
.01 cent per barrel ($10.00 per contract) = $1,000
Then each move .01 cent move is worth $10
There are 100 ( .01 cents ) in $1 ( the 1 point value of CL ), so...100 x $10 per " tick " = $1000 ( 1 Point value )
1/4 of the 1 point value of $1,000 = $250 , which would be a move in CL of .25 cents
Bonds ( ZB )
Each 32nds of a point = ($31.25 per contract); par is on the basis of 100 points $1,000
So a 1 point move " $1 " , is worth $1,000
Divide $1,000 into 32 = $31.25
So.... if ZB moves 8 ticks, that will = $250
Live Cattle ( LE )
Each 0.025 cents per pound = ($10.00 per contract) = $400
So we take.... $1 divided by 0.025 = 40
Now multiply the 40 x $10 ( what each " move " in LE is worth ) = $400 ( for a full $1 move in LE )
a 1/4 move = $100
a 1/10 move = $40
One more, just to make sure I'm understanding this correctly 
Cotton ( CT )
Each 0.01 cents per pound = ($5.00 per contract) = $500
So we take $1 divided by .01 = 100
Now we multiply the 100 x $5 ( what each " move " in CT is worth = $500 ( for a full $1 move in CT )
a 1/7 move = $71
a 1/30 move = $16
I think I finally understand how to calculate out correctly, the different commodities / Futures
and from doing so, I see why a lot can be made or lost trading Futures, and why Margins ( especially overnight Margins ) are so high.... especially for SI and HO
Good thing there are the Mini contracts
Thanks again
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