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What is 1 pip ( tick ) worth
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What is 1 pip ( tick ) worth

  #1 (permalink)
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What is 1 pip ( tick ) worth

in the various Instruments please......

1. 6E
2. M6E
3. 7E

I'm wondering what the profit/loss would be, if I was to buy each of the following instruments, as the same way I would buy a stock, say in AAPL

If I bought 100 shares of the.... 6E, M6E, 7E
and each of these instruments moved 10 pips ( ticks ), what would my realized profit/loss be on each ?

I trade Forex, and am familiar with the EUR/USD , which these 3 instruments " Mimic " move for move, I'm just cuious as to the specs of these 3 instruments

Thank you - Michael

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  #3 (permalink)
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contract specifications


You can find the contract specification on the CME site

an example for 6E :
http://www.cmegroup.com/trading/fx/g10/euro-fx_contract_specifications.html

you can see 1 tick for 1 contract = 12.5 $

same information is available for other contracts/instruments

pip = FX
tick = futures

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6E = $12.50
E7 = $6.25
M6E = $1.25

Also you couldn't trade 100 contracts of each (unless you had the margin anyway.)

To trade 100 contracts of M6E would be inefficient as well as harder to do because it has less liquidity.

I also trade the E7 and M6E using the 6E chart (I do not use M6E or E7 because they can be harder to read as they are less liquid.) I have used E7 and M6E to talk half positions where I didn't want to trade a full 6E car. So 1 E7 and 2 M6E's give you 75% of 1 6E, if you understand.

But anytime I want to trade more than 3 M6E's I trade E7, more than 2 E7's I go to one 6E. No reason to pay extra commissions on a second car (unless you are scaling).


Last edited by tturner86; October 1st, 2014 at 07:20 PM.
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rleplae View Post
You can find the contract specification on the CME site

an example for 6E :
http://www.cmegroup.com/trading/fx/g10/euro-fx_contract_specifications.html

you can see 1 tick for 1 contract = 12.5 $

same information is available for other contracts/instruments

pip = FX
tick = futures


Let me try for if (all of) you agree:

pip = usual in FX.
tick = usual in futures, but it's correct if you use it in FX.

Home people force
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Difference


Wikmar View Post
Let me try for if (all of) you agree:

pip = usual in FX.
tick = usual in futures, but it's correct if you use it in FX.

in FX you will buy an amount of currency, 100, 345, 1000, 776, 25000, whatever number

in futures, you will buy 1 or more contracts, a contract has a fixed lot size
in case of 6E, you buy 125.000 € (you are actually buying the right in the future for 125.000 €)
hence explanation of @tturner86 to buy mini contracts, to have something smaller than 125.000 €

hopes this helps

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Wikmar View Post
Let me try for if (all of) you agree:

pip = usual in FX.
tick = usual in futures, but it's correct if you use it in FX.

Pip is the 4th decimal place in most major pairs & 2nd for the Yen. Most brokers these days have 5 decimal places. 5th decimal place is the tick. Tick is the SMALLEST price move of any contract/security/etc, so it's 1/10th of a pip in FX. Half a pip exists (5 ticks), half a tick does not exist (at least it cannot be traded on the public exchange).

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k20a View Post
Pip is the 4th decimal place in most major pairs & 2nd for the Yen. Most brokers these days have 5 decimal places. 5th decimal place is the tick. Tick is the SMALLEST price move of any contract/security/etc, so it's 1/10th of a pip in FX. Half a pip exists (5 ticks), half a tick does not exist (at least it cannot be traded on the public exchange).

So, you agree.

Pip is the acronym for "Percentage in Points". When this term became popular, currencies were traded with 4 decimal places (2 decimal places in the Yen crosses).

Later, the 5 decimal places were introduced as "pipettes" as for the fifth decimal place (third decimal place in the Yen crosses). 10 pipettes = 1 pip.

Tick is exactly what you said, so you could use it correctly in FX although usually everybody use pip.

Thats what I tried to summarize:

pip = usual in FX.
tick = usual in futures, but it's correct if you use it in FX.

Home people force

Last edited by Wikmar; October 3rd, 2014 at 09:56 PM.
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k20a View Post
Pip is the 4th decimal place in most major pairs & 2nd for the Yen. Most brokers these days have 5 decimal places. 5th decimal place is the tick. Tick is the SMALLEST price move of any contract/security/etc, so it's 1/10th of a pip in FX. Half a pip exists (5 ticks), half a tick does not exist (at least it cannot be traded on the public exchange).

1/10 pip is rather called pipette.

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