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In the lecture notes we have been told that for a 62500$ contract and tick size of 0.0001, the tick value is 62500 X 0.0001= 6.25$
However, in the past exam paper sep/dec 2015, the question states “three month euro futures 1 Million contract, tick size 0.01% and tick value 25 euro.”
I cant seem to understand where does 25 euro comes from?
Thanks 🙂
It seems you have not watched my free lectures.
The profit on interest rate futures is calculate by dividing by 4 because the are three month futures and there are 4 three month periods in a year.
1M x 0.01% x 1/4 = 25
However, you have never ever needed to use ticks in the exam – I never do because there is no point. It is just as fast and more logical to do it without ticks.
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