Execution
Tick
Also known as: minimum price increment, tick size
The smallest allowable price increment for a given futures contract — and the unit most prop traders count P&L in.
A tick is the minimum price increment a contract can move. Each futures contract has a defined tick size and a defined dollar value per tick. Multiplying ticks moved by dollars per tick gives P&L on the trade.
Common tick values: ES = 0.25 points = $12.50/tick. MES (micro) = 0.25 points = $1.25/tick. NQ = 0.25 points = $5.00/tick. MNQ = 0.25 points = $0.50/tick. MCL = 0.01 points = $1.00/tick. Knowing your instrument's tick value cold is non-negotiable for risk math.
Example
- Long 1 MES at 4500.00, exit at 4504.50. Move: 4.50 points = 18 ticks. P&L: 18 × $1.25 = $22.50.