Turn chart movement into real dollar exposure so risk is known before you click buy.
Cadet
0 days
You cannot manage risk you cannot calculate. This lesson turns the abstract movement you see on a chart into the exact dollar figure that will hit your account balance.
A point is one full unit of price movement in the underlying index. A tick is the smallest increment the contract is allowed to move, and each tick has a fixed dollar value set by the exchange. Multiply ticks moved by tick value by number of contracts, and you have your profit or loss. There is no ambiguity and no interpretation.
| Contract | Tick size | Tick value | Value per point |
|---|---|---|---|
| ES | 0.25 | $12.50 | $50 |
| MES | 0.25 | $1.25 | $5 |
| NQ | 0.25 | $5.00 | $20 |
| MNQ | 0.25 | $0.50 | $2 |
| YM | 1.0 | $5.00 | $5 |
| MYM | 1.0 | $0.50 | $0.50 |
Worked example: you are long 2 MNQ and Nasdaq moves 40 points in your favour. That is 40 × $2 × 2 contracts = $160. Move 40 points against you instead and the arithmetic is identical in the other direction. Nasdaq routinely travels 40 points in a couple of minutes, which is exactly why this calculation has to be automatic for you.
The E-mini S&P 500 (ES) moves one tick (0.25 points). How many dollars is that per contract?
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