Energy, metals, bonds and currencies
Lesson 7 · about 11 min
Outside the equity indices, each product family quotes price in its own units, and the tick math has quirks that catch people who learned on ES. This lesson goes through crude oil, natural gas, gold, the Treasury contracts and the euro. The pattern is always the same: find the contract unit, find the minimum fluctuation, multiply.
Energy: CL, MCL and NG
| Contract | Unit | Quoted in | Tick size | Tick value | Point ($1) value |
|---|---|---|---|---|---|
| CL | 1,000 barrels | $ per barrel | 0.01 | $10 | $1,000 |
| MCL | 100 barrels | $ per barrel | 0.01 | $1 | $100 |
| NG | 10,000 MMBtu | $ per MMBtu | 0.001 | $10 | $10,000 |
Crude is the easy one: a cent is a tick, a dollar is a point, and a $1 move is $1,000. At $78 per barrel one CL is $78,000 of notional, and a 2% day is about $1.56, or $1,560 per contract.
Natural gas is the trap. It is quoted to three decimals, so a tick is a tenth of a cent and worth $10, which means a one-cent move is $100 and a ten-cent move is $1,000. At $3.00 per MMBtu the notional is only $30,000, but natural gas routinely moves 3% to 5% in a day, and 10% days happen. A 5% day at $3.00 is $0.15, or $1,500 per contract, on a $30,000 notional. NG has one of the highest dollar ranges relative to its notional of any liquid contract, which is why it is nicknamed the widowmaker. There is no reason for a beginner to trade it.
Metals: GC and MGC
| Contract | Unit | Quoted in | Tick size | Tick value | Point ($1) value |
|---|---|---|---|---|---|
| GC | 100 troy oz | $ per oz | 0.10 | $10 | $100 |
| MGC | 10 troy oz | $ per oz | 0.10 | $1 | $10 |
At $2,300 per ounce one GC is $230,000 of notional. Gold moves about 1% on a typical day, which is $23, or $2,300 per contract. A 10-point stop on gold is 100 ticks, or $1,000 on GC and $100 on MGC. People who move from crude to gold often keep saying "a 10-tick stop" when they now mean a $1 move and $100 per contract; write the dollar figure down every time.
Treasuries: ZB and ZN
Bond futures quote price as a percentage of par in points and fractions of 32nds, which looks strange the first time:
| Contract | Underlying | Face value | Tick size | Tick value | Point (1.00) value |
|---|---|---|---|---|---|
| ZB | 30-year Treasury bond | $100,000 | 1/32 of a point | $31.25 | $1,000 |
| ZN | 10-year Treasury note | $100,000 | 1/2 of 1/32 (1/64) | $15.625 | $1,000 |
A price of 112'16 on ZB means 112 and 16/32, or 112.50% of par. A full point (from 112'00 to 113'00) is $1,000 per contract, and the 32 ticks in that point are $31.25 each. ZN ticks in half-32nds, so 110'165 means 110 and 16.5/32, and each tick is $15.625. Some platforms show these as decimals (112.50), some with the apostrophe, some with a dash. The value per point is $1,000 in all cases.
Bonds move a fraction of a percent a day in price, but on $100,000 of face that is still real money: a half-point day on ZB is $500 per contract. Treasury futures are also extremely liquid and are where interest rate news lands first; they are worth understanding even if you never trade them.
Currencies: 6E
| Contract | Unit | Quoted in | Tick size | Tick value | Value of 0.0100 (one cent) |
|---|---|---|---|---|---|
| 6E | €125,000 | $ per euro | 0.00005 | $6.25 | $1,250 |
| M6E | €12,500 | $ per euro | 0.0001 | $1.25 | $125 |
6E is the euro against the dollar, quoted like spot EUR/USD but with a half-pip tick: 0.00005 is $6.25, so a full pip (0.0001) is $12.50, the same as a standard lot in spot forex. At 1.0800 one 6E is $135,000 of notional. A 0.5% day is about 54 pips, or $675 per contract. The micro, M6E, ticks in full pips at $1.25.
Everything in one table
| Contract | Tick size | Tick value | "Point" value | Illustrative price | Notional | 1% move in $ |
|---|---|---|---|---|---|---|
| CL | 0.01 | $10 | $1,000 | 78.00 | $78,000 | $780 |
| MCL | 0.01 | $1 | $100 | 78.00 | $7,800 | $78 |
| NG | 0.001 | $10 | $10,000 | 3.000 | $30,000 | $300 |
| GC | 0.10 | $10 | $100 | 2,300 | $230,000 | $2,300 |
| MGC | 0.10 | $1 | $10 | 2,300 | $23,000 | $230 |
| ZB | 1/32 | $31.25 | $1,000 | 112'16 | $112,500 | $1,125 |
| ZN | 1/64 | $15.625 | $1,000 | 110'16 | $110,500 | $1,105 |
| 6E | 0.00005 | $6.25 | $1,250 per cent | 1.0800 | $135,000 | $1,350 |
The "1% move" column is 1% of notional in every row; that is the single best comparison of how big each contract is. But it is not the same as a typical day: natural gas moves several percent regularly while Treasuries move a fraction of one. Multiply 1% of notional by the product's typical daily percentage range to get the number that actually matters.
Key idea: Every product quotes in its own units. Never carry a stop in "ticks" or "points" from one product to another; recompute the dollars from the spec, and compare one contract's typical day in dollars to your account.
Try it: Using the pip and tick value calculator, enter a 25-tick stop for CL, GC, ZN and 6E and record the dollar risk per contract. Then find each product's approximate average daily range over the last month (your platform's ATR indicator on a daily chart will do) and convert it to dollars per contract. Rank the four by dollars per day.
Recap
- CL: $10 tick, $1,000 point. NG: $10 tick on a 0.001 increment, so $10,000 per $1; extremely volatile relative to notional.
- GC: $10 tick, $100 point; MGC is one-tenth.
- ZB ticks in 32nds at $31.25, ZN in half-32nds at $15.625; a full point is $1,000 on both.
- 6E ticks at 0.00005 for $6.25; a pip is $12.50, a cent is $1,250.
- Compare 1% of notional times typical daily range across products; do not carry tick counts between them.
See it drawn
Original diagrams for the ideas on this page. Illustrative, not real market data.