When working to become a successful trader, it’s very important to know your own risk tolerance. This allows you to select trades that work best for you and will contribute to your overall success. For example, how big is your account? What’s the most you’re willing to lose in one day? Finally, once you have these answers, you need the knowledge to select what fits into your category of risk. In this article, we explore futures contract specifications and how to select the right one for you.
In conclusion, only you can decide what contracts are right for you. We hope the above chart helps you to figure out what works best for your current account size and risk tolerance. To learn more about these contract types and others, we encourage you to visit us in our trade room or check out our YouTube Channel for Live Trade Recaps.
Each futures contract varies based on:
1. Contract size
2. Tick increments per point
3. Dollar value per tick
4. Dollar value per point
A “point” in this instance is one singular number movement either up or down as measured by your charts (ex: 101 to 102). A “tick” refers to the minimum price investment that your chosen security can move up or down. Knowing this information helps identify which contracts will be suitable to trade for each person’s risk tolerance and account size. For example, someone with a smaller account may consider trading the Nasdaq 100 Mini (NQ) or the Dow Industrial Mini (YM). These markets have a smaller dollar value per point/tick. However, someone with a larger account may consider trading contracts with a larger dollar value per point/tick. Contracts such as Gold (CL) or Russell 2000 Mini (TF) fit into this category. Below we’ve outlined a few examples of the major markets we focus on as a quick reference tool for you to access these contract specifications and risk metrics.
Futures Contract Name (Symbol) |
Smallest Measurement of Movement |
Conversion Rate in Contract $ Value |
How Much That Movement is Worth |
E-Mini S&P 500 (ES) |
1 point = 4 ticks |
1 tick = $12.50 |
1 point = $50 |
Nasdaq 100 Mini (NQ) |
1 point = 4 ticks |
1 tick = $5.00 |
1 point = $20 |
Dow Industrial Mini (YM) |
1 point = 1 point |
1 point = $5.00 |
5 points = $25 |
Russell 2000 Mini (TF) |
1 point = 10 ticks |
1 tick = $10.00 |
1 point = $100 |
Oil (CL) |
moves in pennies (.01) |
1 pennie = $10.00 |
10 cents = $100 |
Gold (GC) |
moves in ten cent increments (.10) |
each increment is worth $10.00 |
1 dollar = $100 |
