How Much Is a Tick in Futures & What Is Its Value?

Futures contracts are agreements to buy or sell an asset at a predetermined price on a future date. These financial instruments allow participants to manage risk or speculate on price movements without owning the underlying asset. Futures prices do not move in continuous, infinitely small increments; instead, they fluctuate in specific, standardized steps. This article explains what these price increments, known as “ticks,” are and how their specific monetary value is determined for various contracts.

Understanding a Futures Tick

A “tick” in futures trading represents the smallest price increment by which a futures contract’s price can move. Exchanges where these contracts are traded set this minimum increment as part of the contract specifications. The tick ensures orderly price discovery and contributes to market liquidity by defining the smallest allowable change between trades.

For instance, if a futures contract is quoted in dollars and cents, a tick might be one cent or a quarter of a cent. While a tick defines the smallest price movement, it does not directly represent the monetary value of that movement. That monetary value is determined by combining the tick with another important contract specification.

Calculating Futures Tick Value

Although a tick denotes a price increment, its actual monetary value depends on two factors: the tick size and the contract’s “multiplier,” also known as the “contract size.” The contract multiplier is a constant, set by the exchange, that converts the quoted price change into a dollar amount. It defines how much one full point or unit of the underlying asset is worth in monetary terms for that specific contract.

To calculate the monetary value of one tick: Tick Value = Tick Size x Contract Multiplier. This multiplier might represent barrels per contract for crude oil or ounces per contract for gold, translating the price per unit into the total dollar value for the contract’s movement.

Common Futures Tick Examples

Understanding how tick value is calculated is best illustrated through specific examples of widely traded futures contracts. Each contract has a unique tick size and contract multiplier, which directly influence its tick value. This value is crucial for assessing potential profit or loss from small price movements.

For the E-mini S&P 500 futures contract, a widely traded equity index future, the tick size is 0.25 index points. The contract multiplier for the E-mini S&P 500 is $50 per index point. Therefore, one tick on this contract is valued at 0.25 points multiplied by $50, resulting in a monetary value of $12.50 per tick. A single one-tick move translates to a gain or loss of $12.50 per contract.

Crude Oil (WTI) futures, symbolized as /CL, have a tick size of $0.01, or one cent, per barrel. The contract multiplier for WTI crude oil is 1,000 barrels. Consequently, the value of one tick for a crude oil futures contract is $0.01 multiplied by 1,000 barrels, equaling $10.00 per tick. Every one-cent price change in crude oil corresponds to a $10 change in the contract’s value.

Gold futures, designated as /GC, have a tick size of $0.10, or ten cents, per troy ounce. The contract multiplier for gold futures is 100 troy ounces. Calculating the tick value involves multiplying $0.10 by 100 ounces, which results in a tick value of $10.00 per contract. A ten-cent move in gold prices means a $10 shift in the contract’s value.

The 10-Year Treasury Notes futures contract, or /ZN, has a tick size of one half of 1/32 of a point (approximately 0.015625 points). The contract multiplier for 10-Year Treasury Notes is $1,000 per full point, as the contract has a face value of $100,000 and a point represents 1% of that value. Multiplying 0.015625 by $1,000 yields a tick value of $15.625 per contract. This calculation demonstrates how even small fractional price changes in interest rate futures can result in specific dollar movements.