Every commodity derivatives contract comes with a fixed specification sheet: the lot size (how much of the commodity one contract covers), the tick size (the smallest price step), the quotation unit, the expiry date and the settlement method. This article uses MCX contracts as the worked example; NSE's commodity derivatives segment (NSE Commodities) publishes its own specification sheets for its contracts. On MCX, many commodities trade in more than one size — a main contract plus smaller "mini" and "micro" variants — so you can match the position to your pocket.
What exactly does a contract specification fix?
A futures contract is standardised so that every buyer and seller trades an identical thing. The spec sheet typically defines:
- Lot size — the quantity one contract represents (for example, a main gold contract covering 1 kg while a small "petal" variant covers just 1 gram — sizes are exchange-set and revised, so always check the current sheet).
- Quotation unit — the unit the price is displayed in, which is often not the lot size. Gold is quoted per 10 grams even when the lot is 1 kg.
- Tick size — the minimum price move, which decides how much one price step is worth to you.
- Expiry date and settlement type — when the contract ends and whether it settles in cash or physical delivery.
The idea is the same as lot sizes in equity derivatives — covered in what are lot size and contract value — but commodities add the quotation-unit wrinkle, which trips up many beginners.
Why do main, mini and micro versions exist?
A full-size contract on gold or crude oil represents a large value, and the margin on it can run into lakhs. To keep the market accessible, exchanges list smaller variants of several commodities. MCX's gold ladder is the clearest example — five sizes of the same metal:
| MCX gold contract | Trading unit | Quoted per | Tick size |
|---|---|---|---|
| Gold | 1 kg | 10 grams | ₹1 |
| Gold Mini | 100 grams | 10 grams | ₹1 |
| Gold Ten | 10 grams | 10 grams | ₹1 |
| Gold Guinea | 8 grams | 8 grams | ₹1 |
| Gold Petal | 1 gram | 1 gram | ₹1 |
MCX also lists Mini variants of crude oil, natural gas, aluminium, lead and zinc, and both Mini and Micro silver, alongside the main contracts.
Divya wants gold exposure but has about ₹50,000 of trading capital. The main contract's margin alone might exceed that, while a mini or micro variant lets her take a proportionally smaller position with a proportionally smaller margin. Same price movement, scaled-down stakes.
Smaller contracts can, however, have thinner trading volumes and slightly wider bid-ask spreads — the price of accessibility.
NSE Commodities does the same thing. Its published bullion and energy sheets currently run a full ladder on gold — 1 kg, 100 g, 10 g, 8 g and 1 g — plus 30 kg, 5 kg and 100 g on silver, 100 barrels and 10 barrels on WTI crude oil, and 1,250 mmBtu and 250 mmBtu on natural gas. Same commodity, same price feed, sizes an order of magnitude apart.
How do I calculate a contract's value?
Contract value = price × (lot size ÷ quotation unit). Two worked examples — the lot sizes and quotation unit are the ones the exchange publishes for gold and gold mini, the price is made up:
| Contract | Quoted price | Lot size | Contract value |
|---|---|---|---|
| Gold (quoted per 10g) | ₹75,000 | 1 kg = 100 × 10g | ₹75,00,000 |
| Gold Mini (quoted per 10g) | ₹75,000 | 100 g = 10 × 10g | ₹7,50,000 |
The margin you deposit is a percentage of this contract value, so working it out before placing the order tells you what you are really exposed to. What margins apply in commodity trading covers that next step, and how do commodity futures work shows the daily cash flows the position generates.
And the tick size — why should I care?
If a contract's tick is ₹1 per quotation unit and your lot contains 100 quotation units, every tick is ₹100 in or out of your account. Multiply the tick value by how far the commodity typically moves in a day and you get an honest preview of the daily swings your account will feel.
Things to keep in mind
- Always read the current contract specification on the exchange before trading — lot sizes, tick sizes and available variants are revised from time to time.
- The quoted price is per quotation unit, not per lot; confusing the two makes a position look ten or a hundred times smaller than it is.
- Mini and micro contracts reduce the stake, not the risk per rupee — leverage works the same way at every size.
- Thinner liquidity in smaller variants can make entries and exits costlier; check volumes, not just margin requirements.
Read next
What margins apply in commodity trading? — You can work out a contract's value; now find out how much cash you must put up against it.