What aspect of futures contracts do specifications not cover?

Futures contracts are standardized agreements to buy or sell a specific commodity at a predetermined price at a future date. These contracts are governed by a set of specifications that detail their terms, which typically include price increments, expiration dates, and contract sizes.

The specifications provide essential information for participants in the market to ensure consistency and facilitate trading. For instance, price increments define the minimum price movement allowable, the expiration date indicates when the contract will settle, and contract size specifies the amount of the underlying commodity involved in the transaction.

On the other hand, volatility indexes, while relevant in assessing market conditions and pricing models, are not included as part of the specifications for futures contracts. Volatility indexes are external indicators that reflect the market's expectations of future volatility, but they do not pertain to the fundamental characteristics defined within futures contract specifications. Understanding this distinction is essential for grasping the key elements that define futures trading and the structures surrounding it.