On page 356 of CFAI text Volume 4 Why Multiplier of Stock Futures (q) is required here ? Can we just say the price of the futures is 4,000 x 10 = 40,000 ? Moreover, which one (futures price or multiplier) shall have a unit (Pound, in this case) ? Why both of them have a unit ?
I’m also wondering why both have a unit of pound. What is more unbelievable to me is the example on page 361. "the number of units of stocks is -Nf*q/(1+delta)^T=339(100)/(1.0075)^(2/12)=33,857.81" The is converted to a unit of stocks. This thing shows in many places. Please help.
This is from CMEGROUP. “S&P 500 Futures: Contract Size $250 x S&P 500 futures price”
FTSE 100 Index futures are priced at 10x the FTSE price. For example if the FTSE is priced at 6,000, the contract will be £60,000 futures-trading-guide.com/equity-futures/