... at the Chicago Mercantile Exchange (CME), the contract specification states: 1 Contract = $250 * Value of the S&P 500 If we assume that the S&P 500 is quoting at 1,000, the value of one contract will be equal to $250,000 (250*1,000). The monetary value -- $250 in this case -- is fixed by the exchange where the contract is traded. Marking to Market It is important to understand the main difference between futures and forwards, namely what is called the "marking to market" of futures contracts. A futures contracts on a given asset, like a forward contract, is a binding agreement to deliver a certain quantity of the asset stipulated in the contract (say, a round lot of shares), for a price and at a future date which are both specified in the contract. All aspects of the contract are agreed upon when the parties enter into the agreement, ...

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