Lesson 10 of 12 · 5 min
Futures Basics — Ticks, Points, Contracts and P&L
Long and short, what a point and a tick are worth, the P&L formula and the costs on every trade.
Most prop evaluations trade futures. This lesson covers the units you'll see on every trade.
Long and short
Long: you buy first and profit if price rises. Short: you sell first and profit if it falls. In futures, shorting is as simple as selling — nothing to borrow.
Points, ticks and contracts
Each contract has a value per point: ES $50, MES $5, NQ $20, MNQ $2. A tick is the smallest move — on ES and MES it's a quarter point, so $12.50 on ES and $1.25 on MES.
The P&L formula
Long: (exit − entry) × point value × contracts. Short: (entry − exit) × point value × contracts.
Example
Long 2 MES at 5,800, out at 5,806.
6 points × $5 × 2 contracts = $60, before fees.
Costs on every trade
Commissions are charged per contract, per side. Slippage — getting filled a little away from the price you expected — adds up too, especially in fast markets. Your breakeven is never exactly your entry price.
TradeCompass turns this into your own rules: it checks every trade against them and warns you before you break one.
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Educational content only. Not financial advice, not a buy/sell signal, no guaranteed results.