Why do some people refer to futures contracts as "cars"?
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Why do some people refer to futures contracts as "cars"?
I always wondered why futures contracts are sometimes referred to as "cars". A little Googling and I found this. I thought some of you might wonder the same thing.
Interesting find, was curious myself. Since I had only seen it when referring to the ES I thought hm..1 contract at 1050 = $52,500 nominal value..a 'car'? Way off!
Cars ...
if memory service me right...
it goes back to "old times" and commodities markets when and where almost all commodities were shipped by railway wagons cars. a lot of commodities still shipped/measured by railway cars.
so, that's why 1 car = 1 contract
A loose quantity term sometimes used to describe the amount of a commodity underlying one commodity contract; e.g., "a car of bellies." Derived from the fact that quantities of the product specified in a contract once corresponded closely to the capacity of a railroad car."
One contract used to represent the amount of physical material that could fit inside a railway car, that's why buying 1 contract = 1 car. The term stuck when the S&P futures came around, even though there is no physical material behind that contract.
