Tick Value

Risk Management

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According to Vigil's prop trading glossary, Tick Value is the monetary value of a one-tick movement in a futures contract. A tick is the minimum price increment for a futures instrument. ES (E-mini S&P 500) has a tick value of $12.50, NQ (E-mini Nasdaq) is $5.00. In prop trading, understanding tick value is critical because it directly affects your drawdown limits, position sizing, and whether you pass or fail an evaluation.

This term is part of the full prop firm glossary.

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How does tick value work?

Tick value is the futures equivalent of pip value in forex. Each futures contract has a defined minimum price increment (tick) and a corresponding dollar value per tick. Common values: ES = $12.50/tick (4 ticks per point, $50/point), NQ = $5.00/tick (4 ticks per point, $20/point), MES = $1.25/tick.

For prop firm futures traders, tick value determines position sizing. If your daily loss limit is $1,000 and you trade ES with a 10-tick (2.5-point) stop, your risk per contract is 10 * $12.50 = $125. Maximum contracts: $1,000 / $125 = 8 ES contracts.

Micro contracts (MES, MNQ) have 1/10th the tick value of their full-size counterparts. They allow more precise position sizing and are popular with smaller prop firm accounts. Many prop firm traders use a mix of full and micro contracts to fine-tune their exposure.

What does tick value look like in practice?

TopStep $50K, trading NQ with $5.00/tick. Your stop-loss is 40 ticks (10 points). Risk per contract: 40 * $5.00 = $200. Daily loss limit: $1,000. Max contracts at this stop: $1,000 / $200 = 5 NQ contracts. If NQ moves 60 ticks (15 points) in your favor with 3 contracts: profit = 3 * 60 * $5.00 = $900.

Why does tick value matter for prop firm traders?

Tick Value under prop firm constraints is different from retail. A 10% drawdown on a personal account is recoverable. On a funded account, it ends the account. Size accordingly.

Practical example across firms: FTMO: 2-step, static drawdown, 5% daily loss, from €155. TopStep: 1-step, trailing drawdown, 2% daily loss, from $49.

Common mistake: The most common mistake with tick value: using retail position sizing on a funded account. Prop accounts have hard breach levels that personal accounts do not. Size so your worst-case losing streak stays inside the drawdown limit.

How do different firms handle tick value?

Understanding tick value is essential when choosing and trading with a prop firm. Compare how different firms handle this:

What terms are related to tick value?

Pip Value

The monetary value of a one-pip movement in a forex pair for a given lot size. For USD-denominated pairs, 1 pip on a standard lot is approximately $10. Pip value varies for cross-currency pairs.

Lot Size

The standardized quantity of a financial instrument in a single trade. In forex, 1 standard lot = 100,000 units of the base currency. In futures, lot size varies by contract (1 ES = $50/point, 1 NQ = $20/point).

Position Sizing

The process of determining how many contracts, lots, or shares to trade per position based on your account size, risk tolerance, and the distance to your stop-loss. Proper position sizing is the foundation of risk management.

Max Contracts

The maximum number of futures contracts or forex lots a trader can hold simultaneously, as specified by the prop firm rules. This limit prevents excessive exposure and protects against catastrophic losses.

Risk Per Trade

The maximum dollar amount or percentage of account balance you are willing to lose on a single trade. Most prop firm traders risk 0.5-2% per trade to ensure they can withstand losing streaks without breaching drawdown limits.

See tick value in action
Where can I learn more?

How to Pass FTMO $200,000

Step-by-step guide

How to Pass TopStep $150,000

Step-by-step guide

How to Pass Apex Trader Funding $300,000

Step-by-step guide

FTMO Trust Score

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TopStep Trust Score

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