Education · Stage 1 · 09
Ticks, points and what a move is worth
Two units, used interchangeably by people who should know better, with four times the difference between them. Add the mini and the micro and the confusion is a factor of forty. This article is the conversion, once, properly.
Mak · 3 min read · Stage 1, article 9 of 13
The vocabulary, in three lines
- A point is one unit of the index. If it goes from 21,500 to 21,501, that is one point.
- A tick is the smallest change the exchange permits. On these contracts it is a quarter of a point — so four ticks to a point.
- A handle is loose talk for a whole point, usually a round one.
The tick is not a convention, it is a rule of the contract. Prices exist only at those quarter-point levels: there is no 21,500.13. It is also the unit the order book is built from — every level in the depth is one tick, and the spread between the best bid and the best offer is normally exactly one.
The table
Everything else in this article follows from these two columns. It is worth writing them on something you can see from where you trade.
| Move | In ticks | NQ — mini | MNQ — micro |
|---|---|---|---|
| 1 tick | 1 | $5 | $0.50 |
| 1 point | 4 | $20 | $2 |
| 10 points | 40 | $200 | $20 |
| 25 points | 100 | $500 | $50 |
| 50 points | 200 | $1,000 | $100 |
| 100 points | 400 | $2,000 | $200 |
A daily range of a few hundred points is ordinary on this contract. Multiply that by the mini column and you can see both halves of the same fact: there is a lot of money moving past you every day, and there is a lot of money available to move past you in the wrong direction.
The factor of forty
Somebody says «I was up twenty». Twenty what, on which contract?
| «Twenty» | On the micro | On the mini |
|---|---|---|
| twenty ticks | $10 | $100 |
| twenty points | $40 | $400 |
Same three words, four answers, and the extremes are forty times apart. This is not a vocabulary quibble — it is why comparing results with other traders is so often meaningless, and why an approach copied from someone whose units you did not check will size itself wrongly from the first trade.
The habit that fixes it: write plans in points, and convert to money once. Points are a property of the market and stay true whichever contract you trade. Money is a property of your position size, and it changes the moment you change contracts.
Where this shows up next
Every practical decision in this path eventually passes through this table.
- A stop is a number of points, which becomes a number of dollars, which decides your size — article 8.
- Costs are dollars, which become ticks, which decide what kinds of trade are viable at all — article 7.
- The order book is measured in ticks, and so is every imbalance and absorption you will read later.
It is the most boring page in the stage, and it is the one that quietly makes the other twelve usable.