Calculating pips, points, and ticks for futures contracts

Calculating pips, points, and ticks for futures contracts, especially for the S&P 500 (often traded as E-mini S&P 500 futures), can be a bit confusing due to the different terminologies used. Here’s a clear explanation:

Understanding Points, Ticks, and Pips

Points: This is the standard measure for price movement in futures contracts. For the S&P 500 futures, one point is equal to a price movement of 1.00. So if the price moves from 5388.25 to 5379.00, the difference in points is the difference between these two values.

Ticks: Futures contracts often have minimum price movements, called ticks. For the E-mini S&P 500 futures:
One tick is equal to 0.25 points.
The value of one tick is $12.50.

Pips: In futures trading, especially for the S&P 500, the term “pips” is not commonly used. Pips are more commonly associated with forex trading. For the sake of understanding, if we refer to “pips” in the context of the S&P 500 futures, we can treat one pip as one tick (0.25 points).

Calculating the Movement

Open price: 5388.25
Close price: 5379.00
Short position

Calculate the Point Difference:

Point difference = Open price – Close price
Point difference = 5388.25 – 5379.00
Point difference = 9.25 points

Convert Points to Ticks:

Since one point equals four ticks (1 point = 4 x 0.25 points), we can convert points to ticks.
Tick difference = Point difference × 4
Tick difference = 9.25 × 4 – maybe the FXblue shows this as a pip, but this value is a point for futures
Tick difference = 37 ticks – this value you can see in SQ X as pips

Monetary Value

To find the monetary value of the movement:
Each tick is worth $12.50.
Total value = Tick difference × Tick value
Total value = 37 ticks × $12.50
Total value = $462.50

This online calculator can help: https://insider-week.com/en/futures-calculator/