By Marco BösingWhat Are Tick Size and Tick Value?
Every futures contract has an exchange-defined tick size — the smallest unit by which the price can move. The tick value specifies how much money that minimum movement is worth per contract.
These two values are fundamental for risk management, position sizing, and understanding profit-and-loss calculations in futures trading.
Tick Size and Tick Value for Major Futures
| Contract | Symbol | Tick Size | Tick Value | Points per Tick |
|---|---|---|---|---|
| E-mini S&P 500 | ES | 0.25 points | $12.50 | 0.25 |
| E-mini Nasdaq-100 | NQ | 0.25 points | $5.00 | 0.25 |
| Micro E-mini S&P 500 | MES | 0.25 points | $1.25 | 0.25 |
| Micro E-mini Nasdaq-100 | MNQ | 0.25 points | $0.50 | 0.25 |
| E-mini Dow Jones | YM | 1.00 point | $5.00 | 1.00 |
| Crude Oil | CL | $0.01 | $10.00 | 0.01 |
| Gold | GC | $0.10 | $10.00 | 0.10 |
How to Calculate Profit per Tick
The calculation is straightforward:
Profit/Loss = Number of Ticks x Tick Value x Number of Contracts
Example 1: E-mini S&P 500 (ES)
A trader buys 1 ES contract at 5,400.00 and sells at 5,410.00:
- Price movement: 10 points
- Number of ticks: 10 / 0.25 = 40 ticks
- Profit: 40 x $12.50 x 1 = $500
Example 2: Micro E-mini Nasdaq-100 (MNQ)
A trader buys 2 MNQ contracts at 19,200.00 and sells at 19,215.00:
- Price movement: 15 points
- Number of ticks: 15 / 0.25 = 60 ticks
- Profit: 60 x $0.50 x 2 = $60
Points vs. Ticks
A common point of confusion: points and ticks are not the same thing.
- For the ES, 1 point = 4 ticks (because the tick size is 0.25)
- For the NQ, 1 point = 4 ticks
- For the YM, 1 point = 1 tick (because the tick size is 1.00)
When a trader says "the ES moved 5 points," they mean a movement of 20 ticks, or $250 per contract.
Why Are Tick Size and Tick Value So Important?
Risk Management
The tick value directly determines how much money is at stake with each price movement. A 10-tick stop-loss on the ES means $125 of risk per contract — on the NQ, it would be only $50.
Position Sizing
The correct position size is derived from the maximum risk per trade and the tick value:
Contracts = Maximum Risk / (Stop Ticks x Tick Value)
Example: With $200 maximum risk and an 8-tick stop on the MNQ: $200 / (8 x $0.50) = 50 contracts (theoretically)
Contract Selection
Knowing tick values helps in choosing the right contract. Traders with smaller accounts choose micro contracts with lower tick values to control risk per position.
Frequently Asked Questions
Does the Tick Size Change?
The tick size is set by the exchange and changes very rarely. It may, however, be adjusted when new contract specifications are introduced.
Why Do Different Futures Have Different Tick Sizes?
The tick size is chosen to represent a meaningful minimum price movement for the given market. For crude oil (price ~$70), a tick of $0.01 is appropriate, while for an index (price ~5,400), a tick of 0.25 points makes sense.
How Do I Find the Tick Size for My Contract?
Contract specifications including tick size and tick value can be found on the respective exchange's website (e.g., cmegroup.com) or in your broker's documentation.