Futures tick value and point value: the arithmetic that sets your size
Futures tick value is the cash in one minimum price move: on MNQ that is $0.50 a tick and $2 a point. Here is the arithmetic that turns a stop into size.
Most new futures traders can quote the price of the Nasdaq to the nearest point and have no idea what a one-point move is worth in cash. That gap is where oversized positions come from. So here is the arithmetic, worked out on the Micro E-mini Nasdaq (MNQ), then a table for the four micro contracts you are most likely to trade.
What a tick is, and what a point is
A tick is the smallest price increment a contract is allowed to move. It is not a dollar figure, it is a price distance. For most micro index futures the tick is 0.25 index points, so the price can print 20,150.00, then 20,150.25, then 20,150.50, and nothing in between.
A point is one full index point, so four ticks when the tick is 0.25. Traders talk in points because they are easy to read off a chart. The exchange quotes in ticks because that is the real grid the market trades on.
Each of those has a dollar figure attached, set by the contract, not by you:
- Tick value is what one tick of movement is worth per contract. On MNQ it is $0.50.
- Point value is what one full point is worth per contract. On MNQ it is $2, because a point is four ticks and four times $0.50 is $2.
That is the whole relationship. Point value equals tick value times the number of ticks in a point. Everything else is bookkeeping.
Your risk is measured in dollars, not points. Points times point value equals dollars, and dollars are what fill an account and what break a drawdown rule. Learn your contract's point value before you place a single trade, because it is the multiplier on everything that happens next.
The one calculation you actually use
Turn a price distance into money with one line:
Dollars at risk = ticks of stop distance × tick value × number of contracts.
Or, if you prefer to think in points: points times point value times contracts. Same result. Take MNQ at one contract. A stop 40 points away is 160 ticks. In dollars that is 160 × $0.50, or 40 × $2, either way $80. Widen the stop to 60 points and the risk becomes $120. Add a second contract and both figures double. Nothing here is complicated, but it is the calculation that decides whether a normal losing trade costs you $80 or $800.
MNQ worked out: a $250 stop and a $750 target
Convert the risk to distance. $250 divided by the $2 point value is 125 points, which is 500 ticks. The target, at $750, is 375 points or 1,500 ticks. So on the chart the stop sits 125 points below the entry and the target 375 points above it, and the dollar shape is exactly 3 to 1. Trade the same plan on two contracts and the chart distances do not change, but the money doubles: $500 of risk against $1,500 of target. The price levels belong to the market, the dollars belong to your size.
| Micro contract | Underlying | Tick size | Tick value | Point value |
|---|---|---|---|---|
| MNQ | Nasdaq-100 | 0.25 | $0.50 | $2.00 |
| MES | S&P 500 | 0.25 | $1.25 | $5.00 |
| MYM | Dow Jones | 1.0 | $0.50 | $0.50 |
| M2K | Russell 2000 | 0.10 | $0.50 | $5.00 |
A $0.50 tick shows up three times, yet the point values are wildly different, because the contracts have different tick sizes. On MYM a point is one tick, so a point is worth $0.50. On M2K a point is ten ticks, so a point is worth $5. Carry MNQ arithmetic over to M2K without checking and you will misjudge your risk by a factor of more than two. Every contract has its own grid. The micro futures explainer lays out why these small contracts exist and who they are for, and micro versus mini covers the ten-to-one relationship with the full-size versions.
Why this sets your position size
Position sizing works backward from a dollar amount you are willing to lose, not forward from a number of contracts that feels right. Decide the dollars first, then let the arithmetic tell you the size.
Suppose your rule is to risk no more than $250 on a trade and the setup calls for a 100-point stop on MNQ. A 100-point stop is $200 per contract. $250 divided by $200 is 1.25, so you round down to one contract. You do not get to trade 1.25 contracts, and rounding up to two would put $400 at risk, well past your limit. The stop distance and the point value together cap your size. That is the mechanical core of position sizing for automated futures.
Common mistakes with the arithmetic
The errors are always the same handful, and they are all avoidable.
- Confusing ticks and points. A 40-point stop is 160 ticks. Enter 40 where the platform wants ticks and your stop is a quarter of what you meant.
- Assuming every contract is worth the same. A point is $5 on MES and $2 on MNQ. The same 20-point move is $100 on one and $40 on the other.
- Forgetting to multiply by contracts. All of the per-contract figures double at two contracts and quintuple at five. This is the fastest way to need more account than you planned for.
- Sizing by gut instead of by stop. "Two feels fine" is not a position-sizing method. The stop distance and the point value decide the size, your mood does not.
None of this is advanced. It is the arithmetic under every futures trade, and traders who blow up rarely do so because they got the market wrong. They got the size wrong, which is the same as getting this arithmetic wrong. How size, win rate and the reward-to-risk ratio fit together is the next layer, covered in risk, reward and win rate, and the wider approach is in the futures trading guide.
Frequently asked questions
What is the tick value of MNQ?
One tick on the Micro E-mini Nasdaq-100 (MNQ) is worth $0.50 per contract. The tick size is 0.25 index points, so a full point, which is four ticks, is worth $2. These figures are set by the contract specification at CME Group, not by your broker, and they are the same for every trader in the market.
What is the difference between tick value and point value?
Tick value is the dollar worth of the smallest allowed price move, and point value is the dollar worth of one full index point. Point value equals tick value multiplied by the number of ticks in a point. On MNQ that is $0.50 times four, which is $2 per point. You use tick value for precise stop math and point value for quick chart-to-dollars conversions.
How do I turn a stop in points into a dollar risk?
Multiply the stop distance in points by the point value, then by the number of contracts. A 60-point stop on one MNQ contract is 60 times $2, or $120. On two contracts it is $240. If you prefer ticks, multiply the tick count by the tick value instead. The answer is identical, because the two are just different units of the same distance.
Why is a point worth different amounts on different contracts?
Because each contract has its own multiplier and its own tick size. A point on the Micro Dow (MYM) is worth $0.50, while a point on the Micro S&P (MES) is worth $5, a tenfold difference for the same one-point move on the chart. Never carry the arithmetic from one instrument to another without checking the specification first.
Does tick value change during the day?
No. Tick value and point value are fixed by the contract and do not move with volatility, time of day or price level. What changes is how many ticks the market travels, and therefore how many dollars a given move is worth. That is why a calm afternoon and the 8:30 AM ET data window can produce very different dollar outcomes on the identical contract and size.
- CME Group, "Micro E-mini Nasdaq-100 Futures" contract specifications.
- CME Group, "Micro E-mini S&P 500 Futures" contract specifications.
- NinjaTrader 8 documentation, instrument tick size and point value settings.
Educational content, not investment advice. Trading futures involves substantial risk of loss and is not suitable for every investor. Any reference to Algomyth results is hypothetical, simulated over historical data, and shown in full on the performance page; past performance does not guarantee future results.
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