Notional value helps you determine how much risk and leverage are in a contract.
Notional value is the total value of the underlying asset being bought or sold in a futures transaction.
Notional Value = Contract Size x Current Price
Notional Value is useful in determining hedge ratios if the trader is looking to use futures to offset risk.
For example, if the contract size of the Micro S&P (MES) contract is $5, then the notional value is $5 x the current MES price.
$5 x 4450 = $22250
If a trader wished to protect $100,000 of stock market exposure (in an IRA account, for example) they would need to sell short 5 MES contracts.