FUTURES TRADING ESSENTIALS
How Does Tick Size and Tick Value Work in Futures Trading?
In futures trading, tick size is the minimum price movement for a contract, and tick value is how much each tick is worth in dollars. Together, they define the smallest unit of profit or loss a trader can experience. Tick sizes and values are set by the futures exchanges and vary by market, such as Crude Oil futures, Gold futures, or the E-mini S&P 500 futures.
Tick Size & Value Examples
| Futures Contract | Tick Size | Tick Value | Example Price Move |
|---|---|---|---|
| Crude Oil (CL) | $0.01 per Barrel | $10.00 | 15 Ticks = $150 |
| Gold (GC) | $0.10 per Oz. | $10.00 | 5 Ticks = $50 |
| E-mini S&P 500 (ES) | 0.25 points | $12.50 | 10 Ticks = $125 |
Actual tick sizes and values are defined by the futures exchanges (e.g., CME Group) and subject to change.
Have Questions?
We’re here to help – Connect with a licensed futures broker now.
Understanding Tick Size & Values
Tick size ensures uniform price movement in a futures market, while tick value translates those movements into real dollar terms. For example, if Crude Oil futures move from $80.00 to $80.05 / barrel, that’s 5 ticks, which is equal to $50 in value (5 ticks x $10 tick value = $50).
Traders must understand tick size and value when calculating position risk, potential gains or losses, and order placement.
Frequently Asked Questions
Q: Who sets the tick size and value for futures contracts?
A: Futures exchanges such as the CME Group set the tick size and value for each listed contract.
Q: Do all futures contracts have the same tick value?
A: No, tick sizes and values vary by contract. For example, the E-mini S&P 500 has a different tick value than Crude Oil.
Q: Why are tick sizes important for traders?
A: Tick sizes determine the smallest price change possible, which directly affects trade execution, profit/loss calculations, and risk management.
Continue Your Futures Trading Education
Explore additional beginner futures trading guides, contract explanations, trading tutorials and educational resources in our Futures Trading Education Center.
Ready to Start Trading Futures?
Take the next step and open your futures trading account to discover low day-trade margins, exchange-direct order routing and professional support with Insignia Futures & Options.
