Contract Multiplier
The dollar amount assigned to each index point (or unit) of a futures contract, converting price moves into P&L.
Formula
P&L per contract = Multiplier × Point Change
The contract multiplier is the dollar value assigned to one point of movement in the futures price. For index futures it converts an abstract index level into real dollars. It is sometimes called the point value or dollar value per point.
Multiplier × price change = dollar P&L per contract. Knowing the multiplier is step one of any position-sizing calculation.
Example
ES multiplier = $50. NQ multiplier = $20. A 10-point ES rally = $500/contract. The same 10-point NQ rally = $200/contract. YM multiplier = $5, so 100 Dow points = $500/contract.
Related Terms
Contract Size
The fixed quantity of the underlying asset controlled by one futures contract, set by the exchange.
BeginnerFutures Contract
A standardized, exchange-traded agreement to buy or sell an asset at a fixed price on a set future date, settled daily via mark-to-market.
BeginnerNotional Value
The full economic exposure of a futures position: Futures Price × Contract Multiplier (or Contract Size).
IntermediatePoint Value
The dollar P&L impact of a full one-point move in a futures contract. Equal to the contract multiplier.
BeginnerTick Value
The dollar P&L impact of one minimum price move in a futures contract. Tick Size × Contract Multiplier.
Beginner