Identifier: C3T1L1 · Revision: 2026-10-26 · Classification: domestic

Decision and objectives

Interpret an underlying quotation and multiplier before selecting a series. The decision record must connect the exposure, cash dates and implementable contract, rather than stop at a favorable price forecast.

By the end, you can interpret an underlying quotation and multiplier before selecting a series; distinguish expiry, last trading day and cash or delivery obligations; reject a code whose governing specification is missing.

Prerequisite: C2T7L4; completed Classes 1 and 2 and the Stock Market School foundation or Forex School foundation. All cases below are hypothetical; their prices, costs, rates, dates, contractual assumptions and collateral amounts are teaching inputs, not current offers.

Mechanics

A futures contract is a standardized obligation, not ownership of the index or a prepaid purchase. A long benefits from an increase in the contract quotation; a short benefits from a decrease. The clearing chain stands between market participants, while your operational relationship remains with your intermediary. The contract code is a locator: it identifies a family, underlying, expiry and sometimes a nonstandard adjustment. It does not contain every condition you need.

Build a specification record with quotation unit, multiplier, minimum tick, expiry calendar, final reference and settlement method. The retrieved standard BIST 30 specification uses TRY 10 per index point and cash settlement. Standard single-stock futures instead represent 100 shares and can be adjusted after corporate actions. These verified examples illustrate why a familiar code prefix is insufficient.

Price and return drivers

Notional equals contracts × quotation × cash multiplier. Tick cash equals minimum quotation change × multiplier × contracts. A quotation of 10,000 index points is neither TRY 10,000 paid up front nor a percentage. The multiplier supplies the missing units. Collateral supports the obligation and is calculated separately; it is not the purchase price or maximum loss.

Worked case

A hypothetical ticket says two long index contracts, 10,000 points, TRY 10 per point, tick 1 point, cash settlement. Exposure is 2 × 10,000 × 10 = TRY 200,000; a tick is 1 × 10 × 2 = TRY 20. No TRY 200,000 principal purchase occurs. An illustrative TRY 30,000 deposit and TRY 20 entry commission require TRY 30,020 cash initially; financing and tax are excluded here. Record the deposit as an asset pledged, and commission as an expense.

Adverse case

Suppose the displayed series is actually an adjusted instrument with multiplier 12. Exposure is 2 × 10,000 × 12 = TRY 240,000, TRY 40,000 above the intended size. A 500-point fall loses TRY 12,000 instead of TRY 10,000. If it also delivers a security, a cash-only hedge mandate fails regardless of forecast accuracy. Before expiry the mark can change with carry and liquidity; expiry settlement follows the contractual reference, not the screen last trade.

Practical use

Use a permitted member route and obtain the exact series document and account terms. Confirm that the intermediary offers the series and settlement facility. The official specification page establishes conventions, not executable depth or a current margin quote. Ask for all-in commission and collateral treatment before submitting even a small quantity.

Reconcile the confirmation, position register and cash statement separately. Costs include the quoted bid/ask spread, brokerage and clearing charges, collateral or principal financing, currency conversion, custody where relevant, and exit or termination charges. A mark is not a fill. Any amount explicitly excluded below remains outside the reported result. Tax is excluded from these teaching cases: an actual comparison requires income year, investor residence and individual/corporate status, contract and acquisition dates, settlement form and effective law. The GIB guide, checked 2026-10-26, covers 2025 individual investment income, so its publication date alone does not settle a 2026 derivative liability.

Decision boundaries

A code supports a hedge only when its underlying, units, dates and obligations match the decision. A missing multiplier is a missing exposure amount. Defer an order if a nonstandard suffix cannot be reconciled to an adjustment notice. Do not substitute an illustrative margin amount for a dated broker calculation.

Practice and references

Exercise: a hypothetical three-contract long has quotation 8,500, multiplier TRY 5 per point and tick 0.5 point. Calculate exposure and cash per tick. Solution: 3 × 8,500 × 5 = TRY 127,500; 3 × 0.5 × 5 = TRY 7.50. If the multiplier were mistaken for 10, the intended exposure would be doubled; code familiarity would not protect you.

Takeaway: Reject a code whose governing specification is missing using the actual cash schedule, with every excluded cost and remaining exposure stated.

Reference card: viop-future. Formula: Contract tick cash. Glossary: Multiplier, Expiry. Next lesson: C3T1L2. Topic test.

Sources and verification date (2026-10-26):

Related product cards: viop-index-future.

Shared reference guide