The value of a tick size movement in a derivative‘s price. In other words, it is the smallest “permitted” change in a trading price of some derivative contract (futures, options, etc.). For example, a one tick movement in the price of a Eurodollar futures contract is equal to 0.01, or one basis point in terms of interest rate. The contract is based on a $1 million 3-month (90 days) LIBOR deposit. Each one tick move in the price of a Eurodollar futures contract (contract size = $ 1 million) will be reflected in a profit or loss of $25:

Tick value = Contract size × One tick movement × Maturity factor

Tick value = $ 1 million × 0.01 × 90/360 = $25

Profit = Ticks gained × Tick value × Number of contracts

Loss = Ticks lost × Tick value × Number of contracts

The minimum price fluctuation on the Eurodollar futures contract is a half tick (1/2 tick = $12.50). However, for the nearest expiring month where it is a quarter tick (1/4 tick = $ 6.25).