Tick size is the minimum quoted price movement of a futures contract. Tick value is the dollar profit or loss from one tick per contract. Point value is the dollar change from a full one-point move. Prop traders need all three because a stop entered in chart points must be converted into actual account risk.
Quick reference
| Contract | Minimum tick | Tick value | Point value |
|---|---|---|---|
| E-mini S&P 500 (ES) | 0.25 point | $12.50 | $50 |
| Micro E-mini S&P 500 (MES) | 0.25 point | $1.25 | $5 |
| E-mini Nasdaq-100 (NQ) | 0.25 point | $5 | $20 |
| Micro E-mini Nasdaq-100 (MNQ) | 0.25 point | $0.50 | $2 |
| WTI Crude Oil (CL) | $0.01 | $10 | $1,000 per $1 move |
| Micro WTI Crude Oil (MCL) | $0.01 | $1 | $100 per $1 move |
Contract specifications can change. Confirm the active contract on the exchange product page and trading platform before sending an order.
Tick size, tick value and point value
These terms answer different questions:
- Tick size: How far must price move for one minimum increment?
- Tick value: How many dollars does that increment change one contract?
- Point value: How many dollars does a full point change one contract?
For MES, the tick size is 0.25 and one tick is $1.25. Four ticks make one point, so:
4 × $1.25 = $5 per point.
For MNQ, four ticks make one point and each tick is $0.50:
4 × $0.50 = $2 per point.
Calculate stop risk
Use either formula:
Risk per contract = stop ticks × tick value
or
Risk per contract = stop points × point value
Example: an MES stop is 12 points.
- 12 points × $5 = $60 per contract.
- 12 points ÷ 0.25 = 48 ticks.
- 48 ticks × $1.25 = $60.
Both methods produce the same result.
With three MES contracts:
3 × $60 = $180 before commission and slippage.
Compare MES and MNQ correctly
A 20-point stop does not carry the same dollar risk across contracts.
| Contract | 20-point risk per contract |
|---|---|
| MES | 20 × $5 = $100 |
| MNQ | 20 × $2 = $40 |
| ES | 20 × $50 = $1,000 |
| NQ | 20 × $20 = $400 |
The chart distance alone is incomplete. Multiply by the contract’s point value.
Add costs and slippage
A prop-account risk plan should include:
Planned risk = stop risk + round-turn costs + slippage allowance
Assume two MES contracts, a 10-point stop, $5 estimated round-turn costs for the position and two ticks of adverse slippage per contract.
- Stop risk: 2 × 10 × $5 = $100.
- Slippage: 2 contracts × 2 ticks × $1.25 = $5.
- Estimated total: $100 + $5 + $5 = $110.
The actual fill may differ. This budget simply prevents the stop distance from being mistaken for total risk.
Size from drawdown, not nominal balance
A 100K prop account does not provide $100,000 of risk. If the live distance to the drawdown floor is $2,000 and the trader limits one idea to 5% of that cushion:
$2,000 × 5% = $100 maximum planned risk.
If one MES contract with the chosen stop risks $60 plus costs, one contract fits; two may exceed the budget.
Recalculate after gains, losses, withdrawals and any movement in a trailing drawdown floor.
Contract limits are a ceiling
A firm may state a maximum number of contracts. That maximum is not a recommended size. The smaller of these two numbers should control:
- The firm’s contract limit.
- The number supported by the trader’s dollar-risk budget.
Micro contracts make finer sizing possible. They do not eliminate risk, especially when many micros are stacked.
Rollover and symbol checks
Futures contracts expire. During rollover, liquidity can migrate to a later month. Verify:
- Contract month on the chart.
- Contract month on the order ticket.
- Working orders on the old contract.
- Prop-firm permitted symbols.
- Tick value for the selected product.
A continuous chart can display adjusted history while the order ticket sends a specific contract month.
Common mistakes
- Treating one point as one tick.
- Using ES value for MES or NQ value for MNQ.
- Ignoring commission and exchange fees.
- Forgetting slippage in fast markets.
- Sizing from the headline account balance.
- Trading the wrong contract month.
- Treating the firm’s maximum contract count as a target.
Bottom line
Start with the exchange contract specification. Convert the chart stop into ticks or points, multiply by the correct dollar value, add costs and compare the result with the live drawdown cushion. This turns position sizing into a repeatable calculation rather than a guess.