This is the standard formula for futures ticker symbols.
When you trade a futures contract, the smallest increment that the contract can move is called the “Tick.” Each commodity has a different standard for the value of a tick, which is based on the total size of the contract and the number of ticks in a one dollar move in price. For Gold a Tick equates to .10 cents, so the value of a tick is the size of the contracts, or 100 ounces, multiplied by the value of a tick, or $.10 cents, which equals:
100 x $.10 = $10.
So a $1 move in the price of Gold would equate to a $100 move in the price of a Gold futures contract.
If you are going to trade a futures contract, you should know everything about that commodity and the contract specification. Not knowing the proper contract to trade, or holding a contract through expiration could cause your account a great deal of harm. In addition you should know the fundamentals of the underlying commodity, such as it’s relationship with other commodities, the economy, or dollar. You should also be aware of when economic reports are going to be released that may affect the futures price.
