Hello Elite Traders! I am new to this forum, so thank you for having me. I have a question regarding 'dollars per point' : How can I find the dollar per point of a stock and futures contract? Is a stocks' dollar per point always equal to 1? Thanks for the help!
For futures you could go and read the contract specification. The value per point is written in those specifications. Another way is to place a "what if" order at your broker. You pretend to buy one contract but don't execute the order. Depending on your broker you get to see what the value of the contract is, based on the buy price you entered. You can of course also use a paper trading account (sim account) to do this. Stocks have no leverage between price and value, it is 1.
yes, stocks are 1 dollar futures vary, go to cme website look for commodity, like ags, or interest, or equity, click on contract specs. Shows min tick and dollar amount per tick.
Is it possible that 'Contract Unit' is the equivalent of 'Dollars Per Point'? From the 2 images I uploaded, that's what I get from it. I am trying to learn more about trading futures. That is one of the things that is confusing me and that I cannot find in the 'Contract specs'. Because there's a calculation to manage risk that has intrigued me: Unit Size = 1% of account / [ATR 20] x Dollars per point
Not sure how the CME figures out the dollar amount per point, but its a pretty wild difference between every commodity, i place the odd commodity swing trade, and never know how to size shit so i usually take like 3-4 contracts, and some times thats just brutal if you get offside, but the funniest one was when i took a position in palladium the other day, i took like 1 contract and 1 point was 2500 bucks, i would have been pretty pissed if i dove into that with a 4 contract position and found myself 20k offside on a nothing move. I dont get why certain contracts its just insane, then others its nothing, you would think there would be some kind of standard metric between the different contracts, or atleast a rational metric, whereby 1 contract is about what a small trader would be willing to lose on. i.e. a few hundred bucks if you get it right/wrong.
It depends from contract to contract. Let's take your example first: YF (heating oil). The CME page of this contract is here: http://www.cmegroup.com/trading/ene...-oil-platts-swap_contract_specifications.html It states that one contract covers 42,000 gallons. And states that the price is quoted in "U.S. dollars and cents per gallon". So the multiplication factor is 42,000 (= value per dollar). Now take another example: corn futures at CME: http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/corn_contract_specifications.html One contract contains 5,000 bushels and the prices is quoted in "cents per bushel" (not US dollar per bushel!). This makes that the contract's value per dollar is 50 (not 5000!).
it's based on how the commodity is transported or stored. 5000 bushels is about one train car load of corn. They ship palladium in little itty bitty Lionel trains.
I believe this is exactly what I wanted to know, assuming that 'value per point' is the same thing as 'dollar per point', is that correct? Do other price quotes than "cents per [...]" and "dollars and cents per [...]" exist?
Thx Java, thats interesting to know, i never knew that, i really appreciate that information, i always wondered how they figured it out.