Search the word tick and most results describe a small parasitic insect, not a term used in financial markets. In futures trading, the term means something entirely different, and it is one of the first pieces of jargon a trader runs into when opening a contract specification sheet. Right beside it sits a second term, tick value, that is easy to confuse with the first.
This article breaks down what a tick is in simple terms: the difference between tick size and tick value, how tick value is actually calculated, how the numbers vary from one contract to the next, and why they matter before a trader ever places an order. None of it requires advanced math, only a clear sense of what each number measures.
What a Tick Actually Is
In futures trading, a tick is the smallest price increment a contract's price can move. Exchanges set this minimum price fluctuation individually for each contract, so the quoted price on a given futures contract cannot change by any amount smaller than one tick. A market quoted in quarter-point increments, for example, can move from 4,500.00 to 4,500.25, but not to 4,500.10, because a tenth of a point is smaller than one tick.
Tick size is one of the earliest concepts covered in futures trading for beginners, and it varies from one contract to the next. Some markets move in increments of a quarter point, others in increments of a tenth of a cent, and a few in whole-number steps. The tick figure on its own carries no inherent meaning until it is converted into a dollar amount, which is the job of tick value. That distinction, between the size of the move and the money attached to it, is where the next section begins.
Tick Size vs. Tick Value: Two Different Numbers
Tick size and tick value are related, but they measure two different things, and mixing them up is common. Tick size is a price measurement. It is the minimum amount a contract’s quoted price can change, expressed in the units that market trades in, whether that is index points, cents, or dollars per barrel.
Tick value is a dollar measurement. It is how much that one-tick price move is worth in real currency for a single contract. Two contracts can share the same tick size and still carry very different tick values, because tick value is derived from tick size using the contract's multiplier. The next section walks through that calculation step by step.
Term | What It Measures | Example |
Tick size | The minimum price increment a contract can move | 0.25 index points on the E-mini S&P 500 |
Tick value | The dollar amount that one tick move is worth | $12.50 per tick on the E-mini S&P 500 |
How Tick Value Is Calculated
Calculating tick value is straightforward once the two inputs are known. Tick value equals the tick size multiplied by the contract's point multiplier, the dollar figure the exchange assigns to a one-point move. Both numbers are published in the contract's specifications rather than estimated by the trader, so working out how to calculate tick value comes down to reading the spec sheet correctly and multiplying.
The multiplier is the piece that does the work. It translates an abstract price move into a currency amount, which is why the same tick size can produce very different tick values from one contract to another.
Worked example, E-mini S&P 500 (/ES):
Tick size: 0.25 index points
Contract multiplier: $50 per index point
Tick value: 0.25 x $50 = $12.50 per tick
A four-tick move: 4 x $12.50 = $50 in notional profit or loss on one contract, before fees and profit splits
That final figure, the dollar result of a given move, is what a trader is really working with when a position moves for or against them.
Tick Size and Tick Value Across Popular Futures Contracts
Tick size and tick value are set independently for every futures contract, so the same four-tick move can represent a very different dollar swing depending on what is being traded. The table below compares tick size and tick value across several widely traded contracts and their micro equivalents, along with how many ticks make up a full point in each.
Contract | Tick Size | Tick Value | Ticks per Point |
E-mini S&P 500 (/ES) | 0.25 points | $12.50 | 4 |
Micro E-mini S&P 500 (/MES) | 0.25 points | $1.25 | 4 |
E-mini Nasdaq-100 (/NQ) | 0.25 points | $5.00 | 4 |
Crude Oil (/CL) | 0.01 ($1/barrel) | $10.00 | 100 |
Gold (/GC) | 0.10 | $10.00 | 10 |
The micro contracts illustrate the point clearly. A Micro E-mini S&P 500 (/MES) shares the exact tick size of its full-size counterpart, yet each tick is worth a fraction of the larger contract’s, because the notional value it controls is smaller. For a trader sizing a first position, that difference in tick value, not the tick size, is what changes the dollars at stake. Figures like these can be revised by the exchange over time, so confirming them against the current contract specifications before trading is a common practice.
A smaller tick value does not mean a safer trade. As TPT Trading Educator Nick Dolby puts it: “For new traders, do not let a small tick value deceive you into thinking it is a less volatile or ‘safer’ trade. On the surface the NQ at $5 per tick seems like it would be a ‘safer’ trade than the ES at $12.50 per tick, but that is not the case. Remember, most of the products you will be trading as a new trader will have a micro version of it as well. You can always dip your toe in the water with a micro to get the hang of the price action before sizing up.”
Why Tick Value Matters for Risk Management
Tick value is the unit that turns a chart-based stop distance into a dollar figure. A stop placed eight ticks away from an entry is not meaningful on its own. It becomes a specific dollar amount at risk only once it is multiplied by the contract’s tick value, at which point eight ticks on one contract becomes a concrete number a trader can weigh against the size of the account.
This is the same math that underlies position sizing. Rather than choosing a contract count first, many traders work backward from a fixed dollar amount they are willing to risk and their stop distance in ticks, then let those two inputs determine how many contracts fit. A separate guide to position sizing walks through that full calculation; the point here is narrower, that getting the tick value input right is what makes the rest of the math reliable.
Tick Value in a Funded Futures Account
Tick value math does not change once a trader moves into a funded account, but the context around it does. The contract’s tick value still determines the dollar swing of every move; what changes is the drawdown framework that swing is measured against.
Trader-set risk per tick: Take Profit Trader evaluations carry no Daily Loss Limit, which means the trader, not the platform, decides how many ticks of adverse movement a position can absorb before it is closed. That places intraday risk in the trader’s hands, though it is not permission to let a losing trade run. A defined max loss and clear stop rules still do the real work.
Drawdown measured in the same dollars tick value produces: Evaluation and PRO+ accounts use an end-of-day trailing drawdown, while PRO accounts use an intraday trailing drawdown. Both are measured in the same dollar terms a tick value calculation produces, so a trader who is comfortable converting ticks into dollars can read the remaining drawdown buffer more accurately.
Full contract specifications on the platform: Tick size, tick value, and margin requirements for each contract are visible directly in the trading platform, so a trader can confirm the numbers before placing a trade rather than estimating them.
A Small Number Worth Knowing Cold
Tick size and tick value are two of the smallest numbers on a contract specification sheet, and among the most consequential. Tick size sets the minimum price move, and tick value converts that move into real dollars gained or lost. Skipping past either one turns stop placement and position sizing into a guess rather than a calculation. Many experienced traders check tick value before touching a new contract for the first time, not after. Getting comfortable with math early, on any account, is one small habit that supports every risk decision that follows. Trading results are never guaranteed, and knowing the numbers is only one part of a longer development process.
Put Your Skills to the Test
Getting started with trading can feel daunting, and no one begins as an expert. So Take Profit Trader offers a straightforward place to learn the ropes. It all begins with free trading education, and a simulated market evaluation to test and hone your skills before eventually graduating into live-market trading. Take the first step into prop firm trading.
Disclaimer: This article is for information purposes only, and should not be construed as legal, investment, financial, or other advice. All investments involve a degree of risk, including the risk of loss. Futures, foreign currency and options trading contains substantial risk and is not for every investor.