What it is:
How it works (Example):
Commodity futures contracts are agreements between a buyer and a seller to deliver a specific amount of a commodity (for example, precious metals, oil, corn, etc.) on a future date at a predetermined price. The denomination amounts are typically very large. Job lots are contracts denominated in smaller amounts, making them accessible to more investors.
For example, a gold futures contract may be issued in denominations of 10 troy ounces. This means that larger contracts increase incrementally to 20, 30, and 40 troy ounces. By contrast, a job lot for gold might be issued in two ounce denominations. This means that the underlying quantity of a gold job lot would rise incrementally to four, and six troy ounces.