What Is a Tick in Futures Trading? Tick Size and Tick Value

A tick is the smallest price increment a futures contract is allowed to move, and the tick value is the dollar amount that move is worth on one contract. The two numbers are set by the exchange and they differ across products. This post defines both, walks through real CME contract specifications, and shows how to read tick value off your own fills so your dollar P&L matches the contract you actually traded.

What a tick actually is in futures

In equities, the standard quoted increment is one cent on most listed stocks. Futures contracts use the same idea, but the exchange picks the tick size per product. The choice is rarely arbitrary. A tick that is too coarse hides real supply and demand inside the increment. A tick that is too fine generates noise and quote churn that nobody trades against.

For the MES contract, the tick size is 0.25 index points.¹ That is one quarter of one S&P 500 index point. A trader cannot enter a working limit order at 5,210.10 because that price does not land on the tick grid. The nearest valid prices are 5,210.00 and 5,210.25.

The tick grid matters in two practical places. First, every limit order has to be rounded to a tick. Second, every fill on a trade closes on a tick boundary. A move from one tick to the next is the smallest possible change in your unrealized P&L.

How tick value differs from tick size

The relationship is mechanical:

Tick value = Tick size × Contract multiplier

Take ES and MES. Both contracts use a tick size of 0.25 index points. The ES contract multiplier is $50 per index point. The MES multiplier is $5 per index point.¹² Apply the formula:

ES  tick value = 0.25 × $50 = $12.50
MES tick value = 0.25 × $5  = $1.25

Identical tick size. Tick values that differ by a factor of ten. The contract behind the tick is what changes the dollar number, not the price increment itself.

This is the reason a trader new to futures often sees a small price move on the screen and underestimates how much money is at stake. The price action looks the same on the chart whether the trade is on ES or MES. The dollar consequence is not the same.

Tick value across common futures contracts

The figures below are from the CME contract specifications for each product.¹²³⁴⁵⁶

Two observations from the table. First, ES and MES share a tick size but differ tenfold in tick value, which matches the difference in multiplier. Second, CL and GC have very different tick sizes ($0.01 versus $0.10) and very different underlying units (barrels versus troy ounces), but they land at the same $10.00 tick value because the contract size on each is designed to put the same dollar weight on one tick of movement.

How tick value drives the dollar impact of a trade

A worked example clarifies. The figures below are illustrative.

Assume a trader is long one MES contract. Entry fills at 5,210.00. The trader exits at 5,215.25. The move is 5.25 index points.

Ticks in the move = 5.25 / 0.25 = 21 ticks
Gross P&L         = 21 × $1.25 × 1 contract = $26.25

Before fees, the position produced +$26.25. After a per-side commission of $0.50 and exchange fees of about $0.37, the round-turn cost might run roughly $1.74 on a MES contract. The net result is closer to +$24.51.

The same price move on ES would produce +$262.50 gross, because the tick value is ten times larger. The chart is the same. The account impact is not.

This is why a journal that records ticks of movement is not enough on its own. The journal needs to know which contract carried that movement. A 4-tick winner on MNQ and a 4-tick winner on NQ are different events in dollar terms, even if they look identical in a screenshot.

Why the same index moves a different number of dollars per contract

A trader who wants exposure to the S&P 500 through futures has two choices on CME: ES at a $50-per-point multiplier or MES at a $5-per-point multiplier.¹² The choice is not about the index. The index is identical. The choice is about the dollar resolution at which the trader sizes risk.

A few practical implications.

• Position sizing in MES contracts can express risk in finer dollar increments. Ten MES contracts and one ES contract carry the same notional exposure to the S&P 500, but ten MES contracts can be scaled down one at a time, while one ES contract can only be on or off.
• A trader running a fixed-dollar risk per trade can convert that dollar risk into ticks of stop distance more granularly on a micro. A $200 stop on MES is 160 ticks. The same $200 stop on ES is 16 ticks. The same percent move in the index translates to a different tick distance because the dollar weight per tick is different.
• Slippage is a constant in ticks for a given liquidity condition, but is not a constant in dollars. One tick of slippage on ES costs ten times what one tick of slippage on MES costs.

None of this changes the underlying market. It changes the unit in which the trader is allowed to scale exposure to that market.

What to record in your journal so tick value works for you

A trader's log should answer three questions for every closed trade.

• Which contract was traded, written explicitly, not inferred from the platform default.
• What is the tick value of that contract, written in dollars at the time of the trade.
• How many ticks of price movement occurred between the entry fill and the exit fill, computed from prices rounded to the tick grid.

Once those three are recorded, every other dollar metric, including average winner, average loser, expectancy, and profit factor, can be reconstructed from first principles. Once any one of them is missing, the dollar metrics are reconstructed from assumptions, and the assumptions are usually wrong.

A common failure mode is journals that store ticks without storing the contract. A second common failure mode is journals that store the contract symbol but read tick value from a stale lookup table. Tick values do not change often, but exchange products are added and retired, and a stale lookup quietly mislabels a new contract's dollar P&L.

Frequently asked questions

Frequently asked questions

• q: What is the smallest tick size on CME equity index futures? a: The tick size on the E-mini S&P 500 (ES) and the Micro E-mini S&P 500 (MES) is 0.25 index points. The same 0.25 index-point tick size applies to the E-mini Nasdaq-100 (NQ) and the Micro E-mini Nasdaq-100 (MNQ). The tick size is identical across these four products. The tick value is not.
• q: Why do ES and MES have the same tick size but different tick values? a: Tick value is tick size multiplied by the contract multiplier. ES uses a $50-per-index-point multiplier; MES uses a $5-per-index-point multiplier. Multiplying 0.25 by $50 gives $12.50 per tick on ES, and multiplying 0.25 by $5 gives $1.25 per tick on MES.
• q: How do I find the tick value for a futures contract I have not traded before? a: The exchange publishes the tick size, tick value, and contract multiplier on the contract specifications page for each listed product. CME Group hosts these pages under its product directory. Treat the exchange page as the source of truth and treat broker or platform lookups as derived data that can lag behind a spec change.
• q: Does tick value change over time? a: Tick value for a given contract is set in the contract specification and does not change with price. It can change if the exchange revises the contract, which is rare. New contracts can be listed alongside existing ones with different tick sizes or multipliers, which is how full-size and micro versions of the same index coexist.
• q: How does tick value affect my position sizing? a: Tick value sets the dollar weight of a single tick of price movement on one contract. Position sizing in dollars is tick value multiplied by tick distance multiplied by contract count. A finer tick value, such as the micro contracts, lets a trader express the same notional exposure with more granular dollar control on stops and targets.

Sources

Footnotes

1. CME Group. Micro E-mini S&P 500 Futures Contract Specifications. https://www.cmegroup.com/markets/equities/sp/micro-e-mini-sandp-500.contractSpecs.html ↩ ↩² ↩³ ↩⁴

2. CME Group. E-mini S&P 500 Futures Contract Specifications. https://www.cmegroup.com/markets/equities/sp/e-mini-sandp500.contractSpecs.html ↩ ↩² ↩³

3. CME Group. E-mini Nasdaq-100 Futures Contract Specifications. https://www.cmegroup.com/markets/equities/nasdaq/e-mini-nasdaq-100.contractSpecs.html ↩

4. CME Group. Micro E-mini Nasdaq-100 Futures Contract Specifications. https://www.cmegroup.com/markets/equities/nasdaq/micro-e-mini-nasdaq-100.contractSpecs.html ↩

5. CME Group. Crude Oil Futures Contract Specifications. https://www.cmegroup.com/markets/energy/crude-oil/light-sweet-crude.contractSpecs.html ↩

6. CME Group. Gold Futures Contract Specifications. https://www.cmegroup.com/markets/metals/precious/gold.contractSpecs.html ↩