Module 1 · Market Foundations
What Are Futures Contracts?
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Video lesson coming soon
Futures — The Prop Firm Trader's Instrument
A futures contract is an agreement to buy or sell an asset at a specific price on a future date. Unlike stocks, you don't own anything — you're trading a contract.
Why Futures?
- Leverage — Control large positions with small capital
- Go Long or Short — Profit in both directions equally easily
- No Pattern Day Trading Rule — Unlike stocks, no $25K minimum
- Tax Advantages — 60/40 tax treatment in the US
Popular Futures Contracts
| Symbol | Name | Tick Size | Tick Value |
|---|---|---|---|
| MNQ | Micro Nasdaq | 0.25 | $0.50 |
| MES | Micro S&P 500 | 0.25 | $1.25 |
| NQ | Nasdaq 100 | 0.25 | $5.00 |
| ES | S&P 500 | 0.25 | $12.50 |
How P&L Works
If you buy 1 MNQ contract at 18,000 and sell at 18,010, you made 10 points. Each point = $2.00 (4 ticks × $0.50), so your profit is $20.00.