Notional Value
Notional value is the total dollar value of a futures contract's underlying exposure. It represents how much of the underlying asset you effectively control per contract, regardless of the margin you posted.
Notional value is the full market value of the underlying asset that a single futures contract represents. It is not how much you pay: it is how much you control.
Notional Value = Index Level × Point Value
Examples at current prices
| Contract | Index Level | Point Value | Notional Value |
|---|---|---|---|
| ES | 5,250 | $50 | $262,500 |
| MES | 5,250 | $5 | $26,250 |
| NQ | 19,500 | $20 | $390,000 |
| MNQ | 19,500 | $2 | $39,000 |
These figures update constantly as the index moves. A 1% move in the S&P 500 at 5,250 means ES moves ~52.5 points, worth $2,625 per contract.
Notional value and leverage
The ratio of notional value to margin posted is your effective leverage:
Leverage = Notional Value ÷ Margin
If intraday margin for ES is $500 and notional is $262,500, your effective leverage is ~525:1. This is why futures are high-risk instruments: small percentage moves in the index cause large percentage changes in your account balance.
Why notional value matters
Risk perspective: a “small” 0.5% move in the S&P 500 on one ES contract is $1,312.50. Knowing notional value puts index moves in dollar terms immediately.
Sizing: if you want to hedge a $500,000 equity portfolio with ES futures, you need roughly 2 ES contracts ($262,500 × 2 = $525,000 notional ≈ your exposure).
Prop firm rules: some prop firms cap total notional exposure rather than contract count. Understanding notional helps you stay within their parameters.