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Tick


The smallest price change increment that a future contract is allowed to have by an exchange. The tick for a given contract is set by exchange rules and is standardized by the underlying. For example, the minimum amount of change for a gold futures is set at $0.10 per troy ounce or $10 per contract. Likewise, the minimum amount of change for a silver futures represents $0.005 per troy ounce, worth $25 per contract.

This is also referred to as minimum price movement.



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Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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