A tool for determining the monetary value of the minimum price fluctuation for the Micro E-mini Nasdaq 100 futures contract is essential for traders. This calculation reveals the profit or loss associated with each incremental movement in the contract’s price. For instance, if the minimum price movement, or “tick,” is valued at $1.25, and the price moves up by two ticks, the profit would be $2.50 before commissions and fees.
Understanding this calculation is crucial for effective risk management and position sizing within the futures market. By knowing the precise value of each tick, traders can accurately assess potential gains and losses, allowing for better-informed decisions regarding stop-loss orders and profit targets. Historically, such calculations were performed manually, but now automated tools streamline the process, reducing the risk of error and saving time.
