Tick Value vs. Tick Size: The Real Risk Beginners Ignore
Tick value and tick size sound similar, but they impact your risk in completely different ways. Most beginners confuse them, which is why they blow accounts on contracts they never should’ve touched.
Tick Size: The Smallest Price Movement
Tick size is the smallest increment a futures contract can move. That’s it. It’s structural. It doesn’t tell you how much money you gain or lose—it only tells you the minimum step the price can take.
| Contract | Tick Size |
|---|---|
| MES | 0.25 |
| NQ | 0.25 |
| CL | 0.01 |
| GC | 0.10 |
Tick Value: The Dollar Amount You Actually Win or Lose
Tick value is the money tied to each tick movement. This is the number that hits your account. This is the number that matters for risk. Beginners ignore it and then wonder why their balance evaporates.
| Contract | Tick Value |
|---|---|
| MES | $1.25 |
| ES | $12.50 |
| CL | $10 |
| GC | $10 |
If you need a refresher on how these dollar amounts connect, check your Ticks, Points, and Dollar Value article.
The Dangerous Beginner Mistake
Beginners see a contract with a small tick size and assume it’s “safer.” Wrong. Crude oil moves in tiny tick sizes, but each tick is $10. A five-tick whip is a $50 loss in seconds.
This is also why understanding contract size risk matters—tick value scales with contract multipliers.
Example: Same Tick Size, Different Financial Damage
NQ and MNQ both have a tick size of 0.25. But the tick value?
- MNQ = $0.50 per tick
- NQ = $5.00 per tick
If you trade NQ without knowing this, one normal pullback can destroy your daily limit.
How Tick Value Shapes Stop Losses
If you use a 20-tick stop:
- MES → 20 × $1.25 = $25
- ES → 20 × $12.50 = $250
Same stop width. Ten times the risk.
Final Takeaway: Only One of These Numbers Can Blow Your Account
Tick size tells you how the chart moves. Tick value tells you how fast you blow up if you’re reckless. Stop confusing the two or the market will teach you the expensive way.