I am trying to understand how to calculate point value for each live cattle futures contract by looking at the contract's spec on CME website.
I understand that 0.00025 * 40,000 = $10 which is tick value or in other words dollar amount of minimum fluctuation. However, I do not understand how can I find, how many ticks are in a point?
When I used CME simulator, the info displayed matches my understanding. As you can see, tick size is 0.025 which is 1/40 of a point so $10 * 40
gives us $400 which is dollar equivalent of a point value. If we multiply that with price, we get notional value of the contract.
Now my question is, how could I figure out from the contract specs? I am able to do this for most of the contracts especially index futures but not some agricultural ones.
Thank you for your help!
# Live Cattle
LEQ1
Contract Size: 40000.0
Tick Size: 0.025
Tick Value: $10 (1 points has 40 ticks, so 1 point is 400)
Last Price: $121.850
Notional Value of Order: $48,740.00 ( = 121.850 * 400)
Margin committed to trade: $1,760.00
Side: BUY
Qty: 1
Type: LMT
Limit Price: 121.85
TIF: DAY
https://www.cmegroup.com/trading/agricultural/livestock/live-cattle_contract_specifications.html
$400
and 1 tick in dollar is$10
so there are 40 ticks in point which makes tick size to be 0.025. $\endgroup$0.00025 per pound = $10.00
? I see that it is40,000 * 0.00025
but isn't0.00025 cents per pound
so it should be actually $0.01. The formula only works if I assume they quoted minimum quotation in dollars. $\endgroup$