Enter the futures price value.
Enter the contract size value.
Enter the broker fee value.
Enter the margin value.
History:

Explanation

How to calculate the total cost per futures contract?

The total cost of trading a futures contract can be calculated using the following formula:

Total Cost (C) is given by:

§§ C = (Futures Price \times Contract Size) + Broker Fee + Margin §§

where:

  • § C § — total cost of the futures contract
  • § Futures Price § — the price of the futures contract
  • § Contract Size § — the number of units in the contract
  • § Broker Fee § — the fee charged by the broker for executing the trade
  • § Margin § — the amount required to open a position in the futures market

This formula allows traders to understand the total financial commitment required to enter a futures position.

Example:

  • Futures Price (§ Futures Price §): $100
  • Contract Size (§ Contract Size §): 10
  • Broker Fee (§ Broker Fee §): $2
  • Margin (§ Margin §): $5

Total Cost:

§§ C = (100 \times 10) + 2 + 5 = 1000 + 2 + 5 = 1007 §$

When to use the Cost per Futures Contract Calculator?

  1. Trading Preparation: Before entering a trade, calculate the total cost to ensure it fits within your budget.

    • Example: Assessing whether the total cost of a futures contract aligns with your trading strategy.

  2. Cost Analysis: Evaluate the impact of broker fees and margin requirements on your overall trading costs.

    • Example: Comparing different brokers to find the most cost-effective option.

  3. Risk Management: Understand the total financial exposure when trading futures.

    • Example: Determining how much capital is needed to cover potential losses.

  4. Budgeting: Plan your trading expenses effectively.

    • Example: Setting aside funds for broker fees and margin requirements in your trading budget.

  5. Investment Strategy: Analyze the cost-effectiveness of different futures contracts.

    • Example: Comparing the total costs of various contracts to identify the best investment opportunities.

Practical examples

  • Futures Trading: A trader might use this calculator to determine the total cost of entering a position in crude oil futures, including all associated fees.
  • Portfolio Management: An investor could use the calculator to assess the costs of diversifying their portfolio with multiple futures contracts.
  • Financial Planning: A financial advisor may utilize this tool to help clients understand the costs involved in futures trading and how it fits into their overall investment strategy.

Definitions of Terms Used in the Calculator

  • Futures Price: The agreed-upon price for a futures contract at which the underlying asset will be bought or sold at a future date.
  • Contract Size: The quantity of the underlying asset represented by a single futures contract.
  • Broker Fee: The charge imposed by a broker for facilitating the trade of futures contracts.
  • Margin: The amount of money that must be deposited to open a position in the futures market, serving as a security for the broker.

Use the calculator above to input different values and see the total cost change dynamically. The results will help you make informed decisions based on the data you have.