Every futures contract turns price into money through two numbers set by the exchange: the tick size, which is the smallest step price can take, and the value of that tick. Traders talk in points, but accounts are debited in dollars. Knowing the conversion for the contract you trade is the first piece of risk management, and it is the one most often guessed.
The contracts most intraday traders use
These are the contract specifications published by CME Group.
- E-mini S&P 500 (ES): tick 0.25 index points, worth $12.50. One full point is $50.
- Micro E-mini S&P 500 (MES): tick 0.25, worth $1.25. One point is $5.
- E-mini Nasdaq-100 (NQ): tick 0.25, worth $5.00. One point is $20.
- Micro E-mini Nasdaq-100 (MNQ): tick 0.25, worth $0.50. One point is $2.
- E-mini Dow (YM): tick 1 point, worth $5.00. The micro, MYM, is worth $0.50.
- E-mini Russell 2000 (RTY): tick 0.10, worth $5.00. The micro, M2K, is worth $0.50.
- Crude oil (CL): tick $0.01 per barrel, worth $10.00.
- Gold (GC): tick $0.10 per ounce, worth $10.00.
- 30-year Treasury bond (ZB): tick 1/32 of a point, worth $31.25.
Each equity index micro above is one tenth of its E-mini. The price, the chart and the levels are identical. Only the money per tick changes.
Why the same stop is not the same risk
A ten-point stop on NQ is $200 per contract. The same ten points on ES is $500. Ten points on NQ is also a much smaller move in percentage terms than ten points on ES, because the Nasdaq-100 trades at a far higher index level. Copying a stop distance from one market to another copies neither the dollar risk nor the market's normal noise. Both have to be worked out for the contract in front of you.
Costs are counted in ticks too
Commissions and exchange fees are charged per contract, per side. On a micro they can be a large share of a small winning trade, because the tick value is small and the fee is not ten times smaller. Slippage is measured in ticks. One tick of slippage on entry and one on exit costs $25 on ES and $1 on MNQ. Before trusting any backtest, check that it charged realistic fees and at least a tick of slippage each way.
What to actually do with it
- Keep the tick value of your contract where you can see it while trading.
- Plan every trade in ticks and dollars, never in points alone.
- Start on the micro when you change markets. The chart is the same, and the lesson costs a tenth as much.
- Check the exchange's own contract page when in doubt. Specifications can change, and the exchange is the only source that counts.