Tick size

Tick size is an important consideration in market design, as it influences liquidity, volatility, bid-ask spreads, and overall trading activity. Smaller tick sizes may lead to tighter spreads, thereby reducing transaction costs for traders. In contrast, larger tick sizes can create congestion at the best bid and offer, resulting in thick order books that rarely experience upward (upticks) or downward price movements (downticks).

Tick sizes can change over time due to regulatory measures or decisions made by the operator of a trading venue. For example, during the Tick Size Pilot Program initiated by the U.S. Securities and Exchange Commission (SEC) from October 3, 2016, to March 29, 2019, FINRA and various U.S. stock exchanges published daily lists of securities whose tick sizes were assigned to different test groups and adjusted accordingly.

Additionally, tick sizes can be variable, based on a predefined set of rules that derive an instrument's tick size from its price. The CME (Chicago Mercantile Exchange) supports variable tick sizes primarily for certain options instruments. Their implementation utilizes a Variable Tick Table (VTT), where each predefined code corresponds to a combination of current price and tick size. The applicable tick size is then disseminated in security definition messages as tag 6350-TickRule.

While the term "tick size" is frequently used by derivatives traders, it is universally applicable across all asset classes. In other markets, it may also be referred to as minimum price increment or minimum price variation (MPV). The term minimum price fluctuation is also sometimes used.

In FX markets, the concept of tick size is closely related to a pip—the standard unit of price movement for currency pairs. Just as tick size defines the minimum price increment for a futures contract, a pip represents the smallest change in the exchange rate that is meaningful for trading. For most major currency pairs, one pip is typically 0.0001 of the quote currency, though this can vary for pairs with different conventions.

Here are tick sizes for some popular futures contracts as of 2025:

CME:

• E-mini S&P 500 Futures (ES): 0.25 index points
• E-mini Nasdaq-100 Futures (NQ): 0.25 index points
• 10-Year T-Note Futures (ZN): 0.015625
• Crude Oil Futures (CL): 0.01 per barrel
• Gold Futures (GC): 0.10 per troy ounce

Eurex:

• DAX Futures (FDAX): 1.0 index points
• EURO STOXX 50 Index Futures (FESX): 1.0 index points

A product with a large tick size is usually called a wide tick or large tick product. For example, ZN futures on CME and FESX futures on Eurex are often considered wide tick products. Market makers are usually incentivized to quote in larger sizes on a wide tick instrument where the fair market value has lower probability of moving outside the top price levels (touch).

Tick sizes also have an important effect on volatility modeling for options on futures, as large or variable increments can lead to poor spline fits across outrights.

See our guide on tick sizes and values to learn how to obtain the tick sizes of all instruments on CME programmatically.