A tick is the smallest price increment a futures contract can move, and the tick value is what that increment is worth in dollars per contract: $12.50 on ES, $5.00 on NQ, $10 on GC, and $10 on CL. Every stop, target, and position-size decision you will ever make in futures reduces to this one conversion — price distance × tick value × contracts = dollars. This post covers the definitions (tick vs. point vs. handle), the full spec table for the six contracts most day traders touch, a worked 20-tick-stop example on each, the crude oil quote trap, the position-sizing formula, and how commissions eat into all of it.
Tick vs. point vs. handle
Three words that get used loosely and mean specific things:
- Tick — the minimum price increment the exchange allows. ES cannot trade at 5,600.30; it moves in 0.25 steps. CL moves in $0.01 steps. The tick size is set by CME per contract, and so is its dollar value.
- Point — one full unit of the quoted price. On ES, a move from 5,600.00 to 5,601.00 is one point, which contains four ticks. On CL, a move from 78.00 to 79.00 is one point — and it contains one hundred ticks. Points are a convenience for talking about price; ticks are what you actually pay and earn in.
- Handle — trader slang for the whole-number part of the quote. When ES goes from 5,600.75 to 5,601.75, it "moved a handle." In index futures, handle and point are used interchangeably. When someone says "crude dropped a handle," that's a $1.00 move — a full point.
The reason the distinction matters: "a 20-point stop" and "a 20-tick stop" differ by 4x on the index contracts and 100x on crude. Traders blow up sim accounts — and real ones — by copying a stop distance in the wrong unit.
The spec table
These are the CME specifications for the six contracts that dominate retail futures trading. Bookmark this — everything else in the post derives from it.
| Symbol | Contract | Tick size | Tick value | Point value | Ticks per point |
|---|---|---|---|---|---|
| ES | E-mini S&P 500 | 0.25 | $12.50 | $50 | 4 |
| NQ | E-mini Nasdaq-100 | 0.25 | $5.00 | $20 | 4 |
| MES | Micro E-mini S&P | 0.25 | $1.25 | $5 | 4 |
| MNQ | Micro E-mini Nasdaq | 0.25 | $0.50 | $2 | 4 |
| GC | Gold | 0.10 | $10 | $100 | 10 |
| CL | Crude Oil | 0.01 | $10 | $1,000 | 100 |
Two things to internalize from this table. First, tick value has nothing to do with how "big" the contract's price is — NQ trades at a much higher index level than ES, yet its tick is worth less than half as much ($5.00 vs. $12.50). Second, GC and CL share the same $10 tick value but have wildly different tick sizes, so identical price moves produce very different dollar results. The table, not intuition, is the source of truth.
How to read it: a 20-tick stop on every contract
Take one concrete decision — "my stop is 20 ticks away" — and run it through each row. Dollar risk per contract = 20 × tick value:
| Contract | 20 ticks in price terms | Risk per contract |
|---|---|---|
| ES | 5.00 points | $250 |
| NQ | 5.00 points | $100 |
| MES | 5.00 points | $25 |
| MNQ | 5.00 points | $10 |
| GC | $2.00 per oz | $200 |
| CL | $0.20 per barrel | $200 |
Same stop in ticks, a 25x spread in dollar risk between MNQ and ES. Notice also what 20 ticks covers on each chart: on NQ, 5 points is noise that can print in seconds; on GC, $2.00 is a meaningful intraday swing. A fixed tick count is not a fixed amount of protection — which is why the sizing formula below starts from dollars, not from a favorite tick number.
The CL trap: $1,000 per point
Crude oil is where beginners get hurt by the quote itself. CL is priced in dollars per barrel and the contract covers 1,000 barrels. So when the quote moves from $78.50 to $79.50, that innocuous-looking "$1 move" is 100 ticks — $1,000 per contract.
The trap is that the CL quote looks like a small number. A trader who's anchored to equity prices sees crude "only" moving 80 cents and reads it as a small move. On one contract, that 80 cents is $800 — more than a 3-point adverse move on ES ($150) and a 10-point move on NQ ($200) combined, several times over. Gold has a milder version of the same illusion: GC is quoted in dollars per troy ounce on a 100-ounce contract, so a $5 move in gold — a very ordinary session — is $500 per contract.
The defense is mechanical: before trading any new contract, write down what one point costs, and re-derive your stop in ticks and dollars. If you're moving from index futures to crude, assume nothing transfers. A stop that "feels" the same width on the chart can carry 5–20x the dollar risk.
Position sizing from tick math
The formula is short enough to memorize:
Contracts = risk budget ÷ (stop in ticks × tick value), rounded DOWN.
Three worked examples with a $300 risk budget per trade:
- ES, 12-tick stop: 12 × $12.50 = $150 per contract. $300 ÷ $150 = 2.0 → 2 contracts.
- NQ, 40-tick (10-point) stop: 40 × $5.00 = $200 per contract. $300 ÷ $200 = 1.5 → 1 contract, not 2. Rounding up turns a $300 budget into $400 of actual risk — a 33% overshoot you chose in half a second.
- ES with a $100 budget, 12-tick stop: $100 ÷ $150 = 0.67 → zero contracts. That's a real answer. The trade doesn't fit on the E-mini; on MES the same 12-tick stop costs $15, so the budget supports 6 micro contracts with $90 at risk.
Always round down, and treat zero as a legitimate output. If you trade a funded or evaluation account, your effective risk budget isn't a fixed number either — it's whatever room remains under the trailing drawdown, which shrinks the divisor as your buffer shrinks.
One honest limit: tick math tells you what being wrong costs, not how often you'll be wrong. Perfect sizing on a negative-expectancy strategy just schedules the losses neatly. Sizing controls damage; it doesn't create edge.
Micros: the same math at 1/10th scale
MES and MNQ are exact 1/10th replicas of ES and NQ — same tick size (0.25), same ticks per point (4), one-tenth the tick value ($1.25 and $0.50). Ten MNQ carry the same exposure as one NQ, but the granularity changes what you can do: with micros you can size a position to fit a small risk budget precisely, scale out in pieces, and survive the learning curve at 1/10th the tuition. The NQ vs. MNQ breakdown covers when the micro is the right choice and when it stops making sense.
The one place micros are not 1/10th of the E-mini is cost, which brings us to commissions.
Commissions, measured in ticks
The most useful way to think about trading costs is to convert your all-in round-turn cost (commission + exchange and clearing fees, both directions) into ticks of the contract you trade:
Break-even ticks = round-turn cost ÷ tick value.
Exact rates vary by broker and volume tier, so run your own numbers — but purely as an illustration: if your all-in round turn on NQ costs about $4, that's 0.8 ticks of friction per trade. If a micro round turn costs about $1, that's 2 full ticks on MNQ ($0.50/tick). Micro commissions are typically far more than 1/10th of the E-mini's, so the cost burden per tick of profit is heavier on micros — often 2–4x heavier in relative terms.
This matters most when your targets are small. A scalping approach aiming for 8 ticks on MNQ gives back a quarter of every winner to costs before slippage; the identical strategy on NQ gives back a tenth. On a 60-tick swing trade the difference is a rounding error. Cost-per-tick is a strategy-level input, not an afterthought — a system that's profitable on one contract can be a net loser on its micro with the same entries and exits.
Common mistakes
- Reading the CL quote like a stock price. A $1.00 move in crude is $1,000 per contract, not a small move.
- Mixing up ticks and points when copying a setup. Someone's "20-point stop" on NQ is 80 ticks — $400 per contract, not $100.
- Rounding contracts up. 1.5 contracts means 1. The budget is the ceiling, not a suggestion.
- Assuming tick values are uniform. ES ($12.50), NQ ($5.00), and GC/CL ($10) all differ, and GC/CL differ from each other in ticks per point (10 vs. 100) despite the matching tick value.
- Using the wrong point value across index contracts. An ES point is $50; an NQ point is $20. Dollar-based habits don't transfer between them — the ES vs. NQ comparison covers how differently the two actually trade.
- Sizing scalps without commission ticks. An 8-tick target with 2 ticks of round-turn cost is really a 6-tick target.
- Assuming micro costs scale down with the contract. Exposure is 1/10th; the commission usually isn't.
Make the math reflexive
Knowing the table and using it under pressure are different skills. When a stop needs to move or a position needs to be cut, there's no time to open a spreadsheet — the conversion has to be automatic, per contract, in both directions (ticks → dollars and dollars → ticks).
Two ways to drill it. First, before any session, quote yourself the specs of the contract you're trading — tick value, ticks per point, dollar cost of your standard stop — and check your answers against the free futures calculator; thirty seconds a day makes the numbers permanent. Second, put the math under simulated fire: in futures market replay, historical data streams bar-by-bar with the right edge hidden, and every fill marks P&L in real dollars — so a mis-sized CL position shows you its $1,000-per-point reality without costing you anything. A structured simulator routine that includes sizing every single trade from a fixed risk budget is the fastest way to make round-down-and-verify a reflex; TestMax's free plan includes three months of futures replay data with no credit card, and if you're weighing tools more broadly, the futures backtesting software roundup compares the options honestly. Wherever you drill it, the goal is the same: by the time real money is on the line, one tick, on every contract you trade, should be a number you know cold.