Price movements and their impact on profit and loss.
To calculate a price movement and how it impacts Profit and Loss, determine the number of ticks in the transaction from entry to exit, then multiply that by the value of the minimum tick size, then multiply that by the number of contracts.
For the micro e-mini S&P 500 index future, the minimum price fluctuation (the minimum tick size) is .25 index points, and each .25 movement = $1.25.
For example, if a trader purchased 2 lots at 4786.25 and sold 2 lots at 4790.00, the corresponding P&L would be determined as follows:
4790.00 – 4786.25 = 3.75 index points, or 15 ticks (3.75/.25).
15 ticks x $1.25 = $18.75 per contract.
2 contracts x 18.75 = $37.50
To determine the true P&L for the trade subtract commission, exchange, and NFA fees per contract from trade proceeds.
$37.50 | profit on transaction |
- .35 (x2) | exchange fees |
-.29 (x2) | commission |
-.02 (x2) | NFA fees |
=$36.15 | net trade proceeds |