Futures contracts, points, and tick values
A futures price move becomes account risk only after it is connected to a contract's tick size, tick value, multiplier, expiry, and number of contracts.
Contract identity comes first
A futures signal should identify the listed product and the contract month, or publish a clear rule for selecting the active contract. The same product can have several expiries with different liquidity, price, open interest, and settlement dates. A continuous symbol may be useful for a chart, but it is not automatically the tradable contract.
Record the exchange symbol, contract month, session, and timestamp. If the provider uses a continuous series, ask whether it is front-month, volume-based, open-interest-based, or back-adjusted. Each convention can produce a different historical line.
Point value, tick size, and tick value
The point value tells you how much the contract changes in cash for a one-point move. The tick size is the smallest quoted price increment. The tick value is the cash value of that minimum increment. These concepts are connected, but they are not interchangeable. A signal saying “risk 10 points” is incomplete until the reader knows the product and the number of contracts.
| Field | What it tells the buyer | Why it matters in a signal |
|---|---|---|
| Contract month | Which listed expiry is traded. | Determines liquidity, settlement, and roll timing. |
| Tick size | Smallest quoted price step. | Shows how precisely an order and stop can be placed. |
| Tick value | Cash change for one tick. | Converts a price stop into a risk amount. |
| Multiplier | Contract exposure per price unit. | Explains why identical chart moves can mean different cash results. |
Why points can mislead
Two services can both report a 20-point stop while exposing very different cash amounts. One may use a larger contract, more contracts, or a product with a different multiplier. A provider that reports points without contract identity leaves the buyer to infer the risk from a number that sounds comparable but is not.
The same problem affects performance. A published result in points is not an account return unless the contract size, entry, exit, margin, fees, and roll treatment are known. A points-based record can still be useful, but it should be labelled as points rather than converted into a percentage without a declared denominator.
Session and settlement details
A futures contract can trade across a long electronic session, but liquidity and spreads may vary by time. The alert should state its intended session and whether the result is based on a touch, a close, a settlement price, or a filled order. Settlement is not always the same event as the last displayed trade. The settlement guide explains why that boundary matters.
Questions to ask a provider
- Which exact contract month was used in the historical record?
- What are the tick size, tick value, and contract multiplier?
- Does the stop use a traded price, bid, offer, or settlement?
- Are points converted using one contract size across the whole record?
- What happens when volume moves to the next contract month?
Bottom line
Contract specifications are the bridge between a chart and a trade. A serious futures signal publishes enough identity and tick economics for the buyer to calculate the cash consequence before placing an order.