Ticks vs Points in Futures Trading

Futures markets don’t move in dollars or percentages. They move in ticks. Points are just a larger way of describing those same movements. If you don’t understand the difference, you will consistently underestimate risk — even when your entries look perfect.

This page explains how ticks and points actually work, how they translate into dollar exposure, and why this distinction matters far more than most traders realize.

What Is a Tick?

A tick is the smallest price movement a futures contract is allowed to make. That minimum increment is fixed by the exchange and never changes.

For example, if a contract moves from 5000.00 to 5000.25, that is one tick. It does not matter how fast or slow the move happens — the tick size defines it.

Every futures contract has its own tick size and its own dollar value per tick. That’s why identical-looking chart moves can produce very different P&L outcomes across markets.

What Is a Point?

A point is simply a larger unit made up of multiple ticks. It exists for convenience, not precision.

Most index futures use four ticks per point. When traders talk about “points,” they’re usually compressing several ticks into a single number.

Points are useful for describing price levels and ranges. Ticks are what actually determine profit and loss.

Real Examples (Why Traders Get This Wrong)

Let’s say a market moves 10 points.

That sounds small — until you break it down into ticks and dollars.

In one contract, 10 points might represent manageable risk. In another, it might be a catastrophic move.

This is why traders who size positions based on “points” instead of tick value eventually get blindsided. The market didn’t do anything unusual — the math just caught up to them.

Why Tick Value Matters More Than Entries

Tick value determines:

• How much you make or lose per price movement
• How fast drawdowns accumulate
• Whether a stop loss is realistic or cosmetic
• How survivable normal volatility actually is

Two traders can take the same setup, enter at the same price, and experience wildly different outcomes — purely because of contract selection and tick value.

Do the Math Instantly (Without Guessing)

This page explains the mechanics — what ticks are, what points are, and why confusing them blows up risk. When you want the exact numbers for a specific trade, use the calculator.

Tick Value & P/L Calculator lives in the Tools section and does the arithmetic for you. Select a futures contract, enter entry and exit prices, and it returns ticks, points, and dollar profit or loss immediately.

Understanding ticks keeps you from mis-sizing trades. Calculating them precisely is how you stop relying on hope.