Trading & Markets
Tick
The smallest price increment a futures contract can move, with a fixed dollar value per contract. ES ticks are 0.25 points worth $12.50.
In plain English
Every futures contract defines its tick size and tick value. ES: 0.25 index points, $12.50. NQ: 0.25 points, $5. CL: one cent, $10. All profit, loss, and commission math reduces to ticks.
Knowing tick values cold is what lets prop traders size correctly against drawdowns and daily loss limits without a calculator mid-trade.
- A 12 tick stop on 2 NQ contracts risks 12 x $5 x 2 = $120.