Futures Contract Specs, Ticks, and Notional
Multiplier, tick size, tick value, and how to convert a stop into dollars per contract. Free beginner futures course.
Continues What Is Futures Trading?. Track 1 of the futures hub. You cannot size a contract you cannot specify.
If You Cannot Name the Tick, You Cannot Name the Risk
Every listed future is a spec: root symbol, contract months, multiplier, minimum tick, trading hours, settlement, position limits. Amateurs screenshot a chart and skip the PDF. Professionals open the spec first because P&L is multiplier × points, and points are quantized in ticks. This lesson is the arithmetic layer. Margin schedules come next; they sit on top of this layer, they do not replace it.
1. Multiplier, Tick, Tick Value
Three numbers, always:
Notional ≈ Price × Multiplier
Tick value = Minimum tick × Multiplier
P&L ≈ (Exit − Entry) in ticks × Tick value × Contracts
Worked illustration (E-mini S&P style, not a live quote). Multiplier $50 per index point. Minimum tick 0.25 index points. Tick value = 0.25 × $50 = $12.50. A 10-point move is 40 ticks × $12.50 = $500 per contract. If your account-risk cap is $250, you cannot hold a 10-point stop on one such contract. You need a tighter stop, a micro contract, or you pass. Do the same loop in the risk calculator and the P&L calculator.
2. Micros Exist Because Minis Are Large
Micro contracts (often one-tenth of the mini) exist so a small account can express the same market without pretending a mini is “just $12.50.” A micro with a $1.25 tick is still a leveraged notional. It is a smaller knife, not a toy. Full-size contracts (oil, some FX, some ags) can be larger still. Match the contract to the dollar cap, not to the YouTube thumbnail.
3. How to Read the Spec Without Worshipping It
On an exchange spec sheet you want, at minimum: contract unit, tick, hours (including Globex), listed months, settlement (cash vs delivery), position limits, and the official root. Hours belong in Course 4; settlement and delivery in later tracks. Today: if you cannot find tick and multiplier, you are not a trader in that product this week. You are a spectator. Spectators should not send orders.
Venue and broker pages on listed exchanges and brokers tell you who holds the account. The spec tells you what the account is attached to. Both matter. Neither is a stop-loss calculator — that tool converts the spec into prices after you already know the tick.
4. Quote Conventions Differ by Complex
Equity index futures quote in index points. Crude often in dollars per barrel. Treasuries have their own fractional habits. FX futures (contrast the spot forex curriculum) quote like a pair but size like a listed notional. If you import equity “cents” into CL, you will misread a $0.01 tick as cute. Cute ticks on $1,000 multipliers are not cute.
Write the quote convention in the journal header for every product you touch. Headers are cheaper than blown size.
A second worked loop, still illustration: crude-style $1,000 per dollar-per-barrel with a $0.01 tick is $10 per tick. A 40-tick stop is $400 per contract before fees. Two contracts are $800. If 1% of the account is $300, two contracts are already a process break. The chart can still look like a great short. Looks are not the denominator. The denominator is dollars. Micros in energy exist for this reason. Use them or pass. Do not average down a full-size energy contract because the margin looked similar to an e-mini you once traded. Similar margin is not similar tick risk.
Index micros (often one-tenth) scale tick value by about one-tenth. They do not scale overnight news. A CPI print can still travel enough micros to wreck a small account if you stacked ten of them to equal a mini. Ten micros is a mini with extra clicks. Count contracts in dollar space, then in contract space. If you need ten micros to feel like a trader, you may be forcing size the account cannot host. That is an account problem, not a product shortage.
When you change products intra-week, re-read the spec that day. Hours differ. Limits differ. Halt rules differ. A metals halt is not an equity-index halt. A grain limit-up lock is not an ES pause. Importing yesterday’s index stop distance onto gold futures is how people discover dollar-per-tick the expensive way. Keep a one-page crib: root, tick, tick value, hours, next notice or roll. Update it when you roll. Stale cribs are how back months sneak into a front-month process.
Finally: continuous charts used for study are not the contract you can click. Back-adjusted series move history. Your fill is on a month. If the study was on a continuous and the order is on a thin deferred month, slippage will teach you the difference. Spec literacy includes knowing which month the platform defaulted. Defaults are not a thesis.
A second worked loop, still illustration: crude-style $1,000 per dollar-per-barrel with a $0.01 tick is $10 per tick. A 40-tick stop is $400 per contract before fees. Two contracts are $800. If 1% of the account is $300, two contracts are already a process break. The chart can still “look like a great short.” Looks are not the denominator. The denominator is dollars. Micros in energy exist for this reason. Use them or pass. Do not average down a full-size CL because the margin looked similar to an e-mini you once traded. Similar margin is not similar tick risk.
Index micros (often one-tenth) scale tick value by about one-tenth. They do not scale overnight news. A CPI print can still travel enough micros to wreck a small account if you stacked ten of them to “equal a mini.” Ten micros is a mini with extra clicks. Count contracts in dollar space, then in contract space. If you need ten micros to feel like a trader, you may be forcing size the account cannot host. That is an account problem, not a product shortage.
When you change products intra-week, re-read the spec that day. Hours differ. Limits differ. Halt rules differ. A metals halt is not an equity-index halt. A grain limit-up lock is not an ES pause. Importing yesterday’s ES stop distance onto GC is how people discover dollar-per-tick the expensive way. Keep a one-page crib: root, tick, tick value, hours, next notice/roll. Update it when you roll. Stale cribs are how back months sneak into a front-month process.
Finally: continuous charts used for study are not the contract you can click. Back-adjusted series move history. Your fill is on a month. If the study was on a continuous and the order is on a thin deferred month, slippage will teach you the difference. Spec literacy includes knowing which month the platform defaulted. Defaults are not a thesis.
5. Stops Must Be in Ticks You Can Survive
A “20-point stop” is meaningless until it is dollars. Convert: points → ticks → tick value → dollars × contracts. If the implied event move (FOMC, inventory) is larger than your stop, you are not trading a setup. You are donating to the event. Skip the window or cut to a micro. The tool hub exists so this conversion is a habit.
6. Mistakes and Limits
- Memorizing one product’s tick and applying it to another.
- Using margin as a proxy for risk because the spec PDF felt long.
- Back-month charts with front-month tick assumptions.
- Treating micros as practice-play money.
Specs change (tick splits, hours, limits). This page is a map. The live PDF wins. Educational only.
Key Takeaways
- Tick value = tick × multiplier. Notional = price × multiplier.
- P&L is ticks × tick value × contracts — not “how the candle felt.”
- Micros scale the same market down. They do not delete leverage.
- If the spec is unread, the order is improvisation.
- Not a recommendation to trade any root symbol.
Previous: What Is Futures Trading? — linked at the top. Educational only.