ZN Tick Question

Discussion in 'Financial Futures' started by Luto, May 10, 2004.

  1. Luto



    I am starting to investigate trading ZN and am working on the logistics. Since I use TS and IB, I use YN04M and ZN04M to monitor the electronic contract.

    However, and I apologize for such a simple question, I can't reconcile the CBOT contract description with the IB-Ticks.

    On CBOT's site they say a ZN tick is "One half of 1/32 of a point ($15.625/contract) rounded up" So the implication is there are 64 ticks per point.

    However, when I get a quote, it moves in .005 increments. E.g. Bid 108'170 and Ask 108'175.

    Question is:

    1) what does a .005 increment mean in relationship to a "point"?
    And how much is it worth?

    2) What does the " '170" mean in a quote of 108'170

    3) what constitutes a "point". I thought 108'000 to 109'000 was a point, but obviously that is not correct.

    I am just trying to figure what a 1 tick spread is worth in dollars in order to see what type of stop and targets are reasonable for day trading scalping positions.

    Any help is greatly appreciated so I can get off the ground at least. :confused:
  2. Personally, the quotation format of the interest rate complex at the CBOT irritates me. The bunds at the Eurex have a simpler quotation system.

    Let me do my best and explain.

    For ZN: each tick is 1/64 - 0this is represented in quote form as ABC-XYZ where Z is always 5 or 0. When Z is 5 it means half a tick. X can be any number between 0 and 3, Y can be any number between 0 and 2.

    So for example a quote of 107-270 means 107 and 27/32

    A quote of 107-275 means 107 and 27.5/32 which is equivalent to 55/64.

    Each tick is worth $15.625.

    A full point is 32/32 or 64/64 – and is equal to $1000.

    So a full point could be from 107-270 to 108-270 or 106 -125 to 107-125 NOT 106-125 to 106-135.

    Again note that a point is 32/32 or 64/64 while a tick is .5/32 or 1/64.

    I am quite tired right now, so this may not be the best explanation, but hopefully it helps you.
  3. Luto


    CPTrader thanks for taking the time, esp when about to call it a day.

    The form:

    " ABC-XYZ where Z is always 5 or 0. When Z is 5 it means half a tick. X can be any number between 0 and 3, Y can be any number between 0 and 2."

    Makes sense if one assumes the maximum value of XY is 32 and that Y can be any value from 0-9 and not 0-2. E.g. 108'24.5 is a valid quote meaning 108 24.5/32 or 108 49/64.

    Thanks for the help and anyone please feel free to correct me if I am not reading this correctly.
  4. Using your example format - XY should be taken as a unified two digit number (not two independent #s as it sounded like you were thinking) and ranges from 00 to 31 and Z can be either 0 or 5.

    Basically, in the price format is XXX'YYY and you interpret the YYY (fractional part) as YYY/10 32nds.
  5. Actually, XY can have a maximum value of 31. For example you have ticks from 107-300 to 107-305 to 107-310 to 107-315 and then to 108.
  6. Luto


    Thanks guys for your help.

    31 versus 32, the old off by one error... lol