Tick Value
Tick value is the dollar amount gained or lost for each one-tick price movement in a futures contract. It is the most fundamental number for calculating P&L, position size, and dollar risk per trade.
Tick value is the fixed dollar amount that one minimum price increment (one tick) is worth on a specific futures contract. It is determined by the exchange and does not change with market conditions.
Tick Value = Point Value × Tick Size
Tick values for common futures contracts
| Contract | Tick Size | Point Value | Tick Value |
|---|---|---|---|
| ES | 0.25 pts | $50 | $12.50 |
| MES | 0.25 pts | $5 | $1.25 |
| NQ | 0.25 pts | $20 | $5.00 |
| MNQ | 0.25 pts | $2 | $0.50 |
| CL (Crude Oil) | $0.01 | $1,000 | $10.00 |
| GC (Gold) | $0.10 | $100 | $10.00 |
| ZB (30Y T-Bond) | 1/32 pt | $1,000 | $31.25 |
Using tick value to calculate dollar risk
Dollar risk per trade is determined by three variables:
Dollar Risk = Stop Distance (ticks) × Tick Value × Number of Contracts
Example: 10-tick stop on ES, 2 contracts 10 × $12.50 × 2 = $250 risk
Same stop on MES, 2 contracts: 10 × $1.25 × 2 = $25 risk
Using tick value for position sizing
If you want to risk exactly $200 on an ES trade with a 12-tick stop:
Contracts = $200 ÷ (12 × $12.50) = $200 ÷ $150 = 1.33 contracts
Since you cannot trade fractional ES contracts, you would either trade 1 contract ($150 risk) or switch to MES for precise sizing (13 MES contracts = $195 risk with the same 12-tick stop).
Why traders must know this cold
Tick value should be second nature. If you are calculating your stop size in points without knowing the dollar value behind it, you are flying blind on risk management.