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Point value

The dollar value of a one-point move in a futures contract, equal to the contract multiplier.

Traders quote risk in points, so point value is how a stop distance becomes a dollar figure. It is the same number as the contract-multiplier, but platforms often label it "big point value" in their symbol settings.

Getting it wrong is the most common sizing error in futures. A trader used to ES at $50 a point who switches to ym at $5 a point or cl at $1,000 a point will size by habit and be off by orders of magnitude.

Example: risking $300 on a 12-point ES stop means one contract ($50 x 12 = $600) is already double the budget; the right size is one MES ($5 x 12 = $60) or nothing.

Related: contract-multiplier, tick-value, tick-size, position-sizing, risk-per-trade

See it drawn

Original diagrams for the ideas on this page. Illustrative, not real market data.

How a position size is worked outAccount size, risk per trade and stop distance feed into one box giving the number of shares.ACCOUNT SIZE$25,000your capitalRISK PER TRADE1%of the accountSTOP DISTANCE$0.50entry to stopPOSITION SIZE500 sharesrisk budget: $25,000 × 1% = $250position size: $250 ÷ $0.50 = 500 shares
Working out a position size. Three numbers decide how big a trade is: the account, the share of it put at risk, and the distance from entry to stop. One percent of $25,000 is a $250 budget, and a $0.50 stop divides into that 500 times.

Educational only, not advice. Spotted an error? Post in Site Feedback.