A futures position's notional value is its price × multiplier × number of contracts. That's the full market exposure you carry, and it can be many times the cash you deposit.
The same multiplication turns a price move into dollars and tells you how many contracts a hedge needs. Here's how to use it for each, and what it can't show you.
Which price and multiplier should you enter?
Enter the futures price for the contract month you hold, not the spot price. FINRA tells investors to "understand how exposure to futures can differ from exposure to the spot price of a commodity."
The multiplier converts one point of price into dollars. Investor.gov says exchange-traded commodity futures provide "contracts of a set unit size, a fixed expiration date, and centralized clearing." The unit size, and with it the multiplier, is on the exchange's contract specifications page.
Match the units, too. A price in cents, times a contract size in units, gives an answer in cents, not dollars.
Turn a price move into dollars
The calculator multiplies whatever number you put in the price field. Enter the size of a move instead, and the result is your gain or loss. Here are two contracts with a multiplier of 50, priced at 5,000:
| Price move (from 5,000) | Per contract | Two contracts |
|---|---|---|
| 5 points (0.1%) | $250 | $500 |
| 25 points (0.5%) | $1,250 | $2,500 |
| 50 points (1%) | $2,500 | $5,000 |
| 250 points (5%) | $12,500 | $25,000 |
| 500 points (10%) | $25,000 | $50,000 |
A 1% move shifts the position by 1% of its notional value: $5,000 on $500,000. The smallest price step, called a tick, works the same way. With a multiplier of 50, a 0.25-point tick is worth $12.50 per contract.
Long (you bought) or short (you sold), the sums are identical; only the sign changes. Buyers gain when the price rises, and sellers gain when it falls.
Your deposit isn't the most you can lose
Margin is collateral, not the price of the position. Futures exchanges require traders to post margin, the OpenStax finance textbook explains. It "serves as a guarantee that traders will honor their obligations."
Say you deposit 5% of the notional, an assumed round figure: $25,000 on the two contracts above. That's leverage of 20 to 1, so each 1% move is 20% of your deposit. A 5% move against you wipes it out. A 10% move costs $50,000, twice what you put in.
In FINRA's words, the high degree of leverage in futures "can also result in large and immediate losses." Your obligation under the contract doesn't stop at the margin.
Gains and losses are settled every day
Futures don't wait until expiry to settle up. OpenStax calls it marking to market: "cash flows are exchanged daily rather than only at the end of the contract."
So if you're long, a 50-point drop on the two contracts takes $5,000 out of your account that day. If losses drain it, you can face a margin call. FINRA says you "might be required to invest additional money to prevent your investment from being liquidated."
That liquidation, FINRA adds, can happen without your consent or prior notice. FINRA also notes that if you cannot hedge or liquidate, "any existing losses may continue to mount."
For shares bought with borrowed money, the margin call calculator finds the price that sets off a call.
How many contracts hedge a portfolio?
Hedging runs the sum in reverse. The OpenStax text defines it as action firms take "to reduce their exposures to risk." A short futures position gains when prices fall, so it can offset losses on shares you own.
Divide the portfolio's value by the value of one contract. In this example that's the futures price × 50. For a $1 million portfolio, the hedge ratio calculator gives:
| Futures price | One contract (price × 50) | Contracts to cover $1 million |
|---|---|---|
| 4,000 | $200,000 | 5 |
| 5,000 | $250,000 | 4 |
| 6,000 | $300,000 | 3.33 |
| 7,000 | $350,000 | 2.86 |
Only the first two rows come out whole, and you can't trade part of a contract. At 6,000, you choose between 3 contracts, covering 90%, and 4, covering 120%.
As the price climbs, each contract covers more, so the same hedge needs fewer contracts. This count also assumes your portfolio moves one-for-one with the index behind the contract.
Contracts expire, so exposure has to be rolled
You can hold a share for years, but a futures contract has a fixed expiration date. To keep the exposure, you close the expiring contract and open a later one. That switch is called rolling.
Rolling can change your result. FINRA notes that rolling "out of shorter-term contracts into longer-term contracts can, over time, lead to losses or gains." The calculator values a single moment, so it shows none of this, and no commissions or fees either.
Check who you're dealing with
Futures have their own regulator. Investor.gov says the SEC does not regulate commodity futures. The Commodity Futures Trading Commission (CFTC) "is the federal agency that regulates futures trading."
Investor.gov also states that anyone who trades futures with the public must be registered with the National Futures Association (NFA). Its advice: before investing, check that the individual and the firm are registered.
Want leverage with a capped loss? With a bought option, FINRA says, "the premium paid is your maximum loss." The call option calculator prices one with the Black-Scholes model.
Sources
- FINRA, Futures and Commodities (accessed September 27, 2026)
- Investor.gov (SEC), Commodities (accessed September 27, 2026)
- OpenStax (Rice University), Principles of Finance 2e, 20.2 Commodity Price Risk
- OpenStax (Rice University), Principles of Finance 2e, 20.1 The Importance of Risk Management
- FINRA, Options (accessed September 27, 2026)