Identifier: C6T4L1 | Revision: 2026-10-26 | Planned study: 10–15 minutes, excluding extended practice.

Decision and objectives

Decision: Normalize each foreign quotation and delivery rule; a familiar product name does not transfer domestic units or funding. Objectives: Normalize four foreign contract quotation systems; Calculate tick cash without confusing reference notional; Identify delivery and currency obligations. Prerequisite: C6T3L4.

All numerical offers, rates, prices, account chains, fees and contract parameters below are hypothetical, unless a primary document is expressly identified. They are not current executable offers or evidence that a Turkey-resident investor can access them. The assumed investor is a Turkey-resident individual outside a business, with no assumed US citizenship or tax residence; actual classification must be checked. Results are before actual tax unless a fictional tax schedule is explicitly supplied. No account, deposit or trade is required.

Mechanics

An international future requires its own exchange specification even when the domestic product family is familiar. Read exchange, clearing house, exact code, reference, currency, contract unit, quotation, minimum tick, expiry, last trading/notice day, final fixing and delivery. “Micro” is a relative product label, not a universal risk size. Currency futures may exchange two currencies; commodity futures can deliver a physical grade/location; interest-rate futures can quote an inverse rate index rather than a tradable asset price. Broker cutoffs can precede the exchange’s final date.

Price and return drivers

Tick cash equals quote increment times the correct contract conversion factor. For an index, price times multiplier gives reference notional. For a currency quote, convert the base-currency quantity at the USD-per-base rate. For a rate index, do not multiply the quotation by a familiar equity multiplier and call the result deposit notional. Use its stipulated rate-value conversion and accrual reference. The CME pages are primary examples of why specifications differ; the table here deliberately declares synthetic units rather than copying a current complete contract.

Worked case

Hypothetical comparison: index future 5000 points, multiplier USD 5/point, tick 0.25 gives 25000 reference notional and 1.25 USD/tick. Currency future EUR 125000, quote 1.10 USD/EUR, tick 0.00005 gives USD 137500 reference value and 6.25/tick. Commodity future 1000 barrels, quote USD 75/barrel, tick 0.01 gives 75000 and 10/tick; physical delivery is stipulated. Rate future references USD 1000000 for 90/360; price=100−annual rate in percent, multiplier 2500 USD/point, tick 0.0025 gives 6.25/tick. A 1 bp rate rise moves that price down 0.01 and costs 25 USD to the long. Its principal reference remains 1000000, not 95×2500.

Adverse case

For 2 long synthetic index futures entered 5000, expiry 4900, 5000, 5100 gives gross−1000, 0, +1000; total fees 12 gives−1012, −12, +988. A pre-expiry gap to 4600 produces 4000 gross loss, greater than a hypothetical 3000 collateral deposit; another 1000 is needed merely to cover that loss before any restored margin requirement. A physically delivered commodity contract cannot be handled by assuming the index’s cash fixing. Overnight market closures and FX conversion also alter when cash can be supplied.

Practical use

Use current exchange rulebook and contract page plus the intermediary’s actual permitted products, house margin and delivery policy. Confirm the exact exchange session and time zone, not merely a local clock date. The checked CME index overview and WTI physical-settlement page are US examples; their tax descriptions do not apply automatically to a Turkish investor.

Before implementation verify the legal entity, jurisdiction, authorized access, actual instrument identifier and full documents. Include bid/ask, commissions, transfer/FX, custody, funding and exit costs; avoid deducting already embedded fund expenses twice. Recheck residency, income year, acquisition dates, withholding, treaty and domestic declaration treatment. Foreign tax concessions or investor protections do not follow automatically from the instrument name or trading currency.

Decision boundaries

Choose a contract only after units, cash demands and delivery fit. Decline a physical contract when storage, delivery or broker liquidation constraints cannot be met. A smaller contract can improve rounding but still require funding through a gap. A domestic cross-hedge can avoid a foreign access chain while introducing basis risk; compare that risk explicitly rather than transferring a multiplier.

Practice and references

Exercise: synthetic currency future 50000 GBP, quote 1.25 USD/GBP, tick 0.0001. Solution: notional 62500 USD; tick 5 USD. Three long contracts moving 1.25→1.23 lose 3×50000×0.02=3000 USD before fees/funding. The contract is not 50000 USD and a two-cent quote move is not two ticks.

Takeaway: Normalize each foreign quotation and delivery rule; a familiar product name does not transfer domestic units or funding. References: product card, formula; glossary: Foreign contract unit; Rate quotation; Physical commodity delivery. Next: C6T4L2. Topic test.

Sources: GIB: Investment Income Guide (retrieved 2026-10-26; Introduction and foreign income/reporting framework). CME: Micro E-mini S&P500 Contract Specification (retrieved 2026-10-26; Contract size and minimum tick overview). CME: WTI Crude Oil Contract Specification (retrieved 2026-10-26; Physical settlement and product details). CME: Benefits of Futures Margins (retrieved 2026-10-26; Initial, maintenance and broker requirements). Revision: 2026-10-26; recheck changeable rules before publication.

Shared reference guide