Tick, tick size and tick value

Definition

Tick size is the smallest amount by which an instrument's price can change. Tick value is the profit or loss that one tick of movement creates on a position of a given size.

A tick in trading has two related meanings. It is the minimum price step, and it is also a single price update from the market. That second meaning is why you see "tick charts" and "tick volume".

Formal definition

• Tick size is the minimum price increment set in the instrument's contract specification. On exchanges the exchange sets it. With CFD (contract for difference) providers the provider sets it.
• Tick value = tick size × contract size × number of lots. The result is in the quote currency, which is the second currency or the currency the price is quoted in. It is then converted into your account currency.
• Profit or loss = number of ticks moved × tick value.

Worked example (hypothetical)

Take a gold CFD, XAUUSD. The price is quoted in US dollars per ounce.

1. Open the contract specification. Note the tick size (call it T) and the contract size in ounces per lot (call it C).
2. Tick value for one lot = T × C, in US dollars.
3. Your position size is L lots and the price moves N ticks. Profit or loss = N × T × C × L.
4. If your account is not in US dollars, convert the result at the current rate.

To get real figures for a specific instrument, use the trading calculators with the values from the specification.

Where you see it

• MetaTrader contract specification: the fields "Tick size" and "Tick value" sit next to digits and contract size.
• MQL code: MT4 uses MODE_TICKSIZE and MODE_TICKVALUE. MT5 uses SYMBOL_TRADE_TICK_SIZE and SYMBOL_TRADE_TICK_VALUE.
• Futures specifications: exchanges publish a fixed tick size and tick value for each contract, for example the front month.
• Market news: you may read about "tick size regimes" for shares, meaning minimum steps that depend on the price band.

Edge cases experienced traders meet

• Tick vs pip vs point. In forex a pip is a conventional unit. Many brokers quote one decimal place finer, so the tick is a fraction of a pip. A "point" in MetaTrader is the last quoted digit, which is not always the same as the tick size.
• Floating tick value. When the quote currency differs from your account currency, tick value changes with the exchange rate even if tick size stays fixed.
• Rounding. Orders and stops must sit on a multiple of the tick size. A price between steps can be rejected as invalid.
• Indices and energies. On instruments such as US100, tick size and contract size can differ between providers. Read the specification for the exact symbol you trade. See stock indices.
• Variable tick sizes. Some exchanges change the tick size depending on the price level of a share.

Tick value shows how fast a leveraged position gains or loses money. A small move against a large position can wipe out margin quickly, so leveraged CFD and forex trading can lose money fast. See risk management.

Related terms

• Contract size
• Basis point
• Big figure
• Average daily range
• Exposure
• Trading glossary
• Trading basics

Frequent questions

What is tick size?

It is the smallest price change an instrument allows, as set in its contract specification.

What does tick value mean?

It is the money gained or lost when the price moves by one tick, for a given position size.

Is a tick the same as a pip?

Not always. In forex quoted with an extra decimal place, a tick is a fraction of a pip.

Why does tick value change on my account?

It changes when the instrument's quote currency differs from your account currency, because the exchange rate between them moves.

Where do I find exact tick figures?

In the contract specification on your trading platform. You can then check the result with the calculators.