Tick size — The smallest price increment a futures contract can move, set by the exchange for each product.
How tick size works in prop trading
Tick size is the granularity of the market. The E-mini S&P 500 moves in 0.25 index points, crude oil in $0.01, the 10-year Treasury note in fractions of a point. It is fixed per product and cannot be traded through — an order at a price between ticks is invalid.
It matters to prop traders because it converts a stop expressed in price into a stop expressed in dollars, which is the only unit your drawdown is measured in. A 12-tick stop is meaningless until you know the tick size and value of the product; a 12-tick stop on the E-mini S&P is $150 per contract, and on the Micro E-mini it is $15.
Key points
- Set by the exchange per product and identical across all brokers and prop firms.
- Tick size times tick value converts any stop distance into dollar risk per contract.
- Different products have very different tick sizes, so a fixed tick stop is not a fixed risk.
- Micro contracts share the tick size of their full-size equivalent but not the tick value.
Example
The E-mini S&P 500 has a tick size of 0.25 index points. A move from 5400.00 to 5401.00 is four ticks.
Also known as
- minimum price fluctuation
- minimum tick
- price increment
Frequently asked questions
What is the tick size of the E-mini S&P 500?
0.25 index points, worth $12.50 per contract on the E-mini and $1.25 on the Micro E-mini. Tick sizes are set by the exchange and are the same wherever you trade.
Is tick size the same as tick value?
No. Tick size is the price increment; tick value is what one increment is worth in dollars for that contract. Two products can share a tick size and have very different tick values.
Put this into practice
Tick size is described here as a plain-language educational definition. Firms, platforms, and account programs may apply different conditions or calculations. Verify the current official terms before using this definition to make an account decision.