What it means
NQ ticks in 0.25 points ($5), ES in 0.25 points ($12.50), gold (GC) in $0.10 ($10).
Example
NQ moving 10 points is 40 ticks: $200 on one contract.
In practice
Tick value is what turns a chart distance into money. Count the ticks between entry and stop, multiply by the tick value and the number of contracts, and you have the risk on the trade.
Because each futures market has its own tick size and value, the same number of points means very different amounts on different contracts. Traders learn these figures for the few markets they trade.
What to watch for
Mixing up points and ticks is an easy and costly mistake: on NQ one point is four ticks. Check the contract's specification before trading a new market, and remember that micro contracts have one tenth of the tick value.
Related terms
3 terms- Futures contractA standardised agreement to buy or sell something at a set price on a future date, traded on an exchange.
- Micro futuresFutures contracts one tenth the size of the standard ones, so smaller accounts can size positions properly.
- PipThe standard unit of forex movement: 0.0001 for most pairs, 0.01 for yen pairs.