Tick Value Calculator
Tick value is what one minimum price step is worth on a futures contract. It is fixed by the exchange, not by your broker. Multiply it by your stop distance in ticks to get the risk per contract, and divide your total risk by that to get the size.
Tick value and position size
Defaults are a common index future: a 0.25 tick worth 12.50, with an eight-tick stop.
Risk per contract is tick value × stop in ticks. Dividing your total risk by that gives the contract count — and if the answer is under one, the trade is too large for the account rather than the stop being too wide.
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Covered on this page: TradingView.
How the number is built
A futures contract cannot move by any amount it likes. The exchange fixes a minimum increment — the tick — and fixes what that increment is worth. Both numbers are part of the contract specification.
Two multiplications do all the work:
Risk per contract = tick value × stop distance in ticks
Contracts = total risk ÷ risk per contract
Every contract has its own pair of numbers, and they are not interchangeable. An index future, a crude oil future and a treasury future all have different tick sizes and different tick values, so a stop of “eight ticks” means a different amount of money in each.
A worked example
Take the defaults: a tick size of 0.25 worth 12.50, a stop eight ticks away, and 500 of total risk.
Risk per contract is 12.50 × 8 = 100.00.
So 500 ÷ 100 = 5.00 contracts. That is the whole calculation, and it is the direction the decision should run — risk first, contracts last.
The other two outputs are sanity checks. A tick of 0.25 worth 12.50 means a full point is worth 50.00, and an eight-tick stop is 2.00 points. Seeing the stop in points as well as ticks catches the error where a stop that felt tight is actually a long way from the entry.
Now run it with a wider stop. At 20 ticks the risk per contract is 250, and the same 500 of risk buys 2 contracts rather than 5. Nothing about the idea changed — only the distance the stop had to sit at.
When the answer is less than one
Futures do not divide. If the arithmetic returns 0.6 contracts, you cannot take 0.6 — and the temptation at that point is to take one anyway, which is a decision to accept 67% more risk than you had decided on.
Micro contracts are the answer to exactly this. They are typically a tenth of the standard contract, with a tenth of the tick value, so an account that could not size a standard contract correctly can size a micro one properly instead.
The honest reading of a sub-one answer is that the trade is too large for the account — not that the stop should be moved. Moving the stop to fit the size is the inversion that every sizing page on this site argues against, and it is easiest to fall into here because the contract count forces the question.
Fills, sessions and cost
The tick is the smallest step available, not a promise you will trade at it. In a thin market the book can be several ticks wide, so the quoted increment and the price you actually receive are different things.
Futures trade nearly around the clock and are only liquid for part of it. Outside the active session the same contract shows a wider book, which means an eight-tick stop is a smaller cushion than it looks.
Commission is charged per contract, so it scales with the size the calculator returns. It is paid on the way in and again on the way out — and at five contracts that is paid five times.
Margin is a separate limit
Risk sets how many contracts you should take; margin sets how many you are allowed to take. They are different numbers, and the smaller one wins. A size that passes the risk arithmetic can still be refused by the broker, and a size the broker allows can still be far past the risk you chose.
Day-trade margin is also not overnight margin. Brokers commonly set a low intraday requirement and a much higher one for a position carried past the close, so a position sized on the intraday figure can force a choice between closing and funding the difference before the session ends.
The original data
Of the 24,971 unique videos in this site’s search study, futures appear in 268 instruction-shaped titles at a median of 8,204 views across 187 channels, and prop firms and funded accounts — where most retail futures trading now starts — in 525 at 12,428.
The question: Four ticks of risk per contract. How many?
525 videos about prop firms and funded accounts. Every one of those evaluations has a daily loss limit measured in money, and converting that limit into a contract count requires exactly this arithmetic.
The answer is that four ticks does not set the size — your risk does. Multiply the tick value by four, then divide your loss limit by the result. If that gives less than one contract, the honest conclusion is that the stop is too tight for the contract, not that the risk should be raised to fit.
When it fails
A gap does not respect the tick. Price jumps from one level to another with nothing traded in between, so a stop placed eight ticks away can fill twenty ticks away — and the risk-per-contract figure the size was built on was never the real one. Futures gap on weekend news and on scheduled releases, which is why the overnight session is a different risk from the day session even in the same contract.
The second failure is using one contract’s numbers on another. Tick sizes and values differ by contract and the arithmetic is silently wrong if the pair is mismatched.
A third is taking one contract when the answer was a fraction. It is a decision to exceed the risk you set, made because the instrument would not divide.
A fourth is ignoring the multiplier when comparing contracts. A contract with a small tick value is not automatically a smaller position — the point value is what matters.
A fifth is trading the illiquid session. The book widens and the effective stop distance grows.
And a sixth is forgetting commission scales with contracts. The per-trade cost at five contracts is five times the cost at one.
Related
Futures contract covers what the contract is and what the specification fixes. Position sizing is the arithmetic this feeds, in every market. And stop loss is where the tick distance in step one comes from.
Futures catch people out because the contract does the sizing for you. In shares you can buy one more or one fewer; in futures the smallest unit is often already a large position, and if the arithmetic says 0.6 contracts the honest answer is that the trade does not fit the account. Micro contracts changed that, and they are the reason a small account can trade this market at all.
— Michael Whitman
This page is educational, not financial advice. Test every idea on your own charts before risking money. Some links on this page earn a commission if you buy through them. It costs you nothing and it does not decide what appears here or in what order — how these pages are made is set out in our methodology.