What is a futures contract? A prop trader’s primer

Every futures prop firm evaluation is priced in contracts: “up to 5 minis”, “50 micros”, “$2,000 trailing drawdown”. Before any of those rules make sense, you need to know what a contract is, what one point of it is worth, and why the symbol on your chart changes four times a year. This guide covers exactly that, in the order you’ll meet it on your platform.

What a futures contract is

A futures contract is an agreement, traded on an exchange, to buy or sell a set amount of something at an agreed price on a set future date. The exchange fixes everything except the price: how much one contract covers, the smallest price step, the months it trades in and how it settles. That standardisation is what lets thousands of traders swap the same contract all day.

The contracts prop traders use are listed by CME Group. Two examples from its rulebooks:

• E-mini Nasdaq-100 (NQ) is valued at $20 times the Nasdaq-100 index and settles in cash. Nobody delivers any shares.
• Crude oil (CL) covers 1,000 barrels and is settled by physical delivery in Cushing, Oklahoma.

You don’t need either outcome. If you buy one NQ and sell it 20 minutes later, you only keep the difference in price, multiplied by the contract’s dollar value. That is all a prop firm evaluation measures.

Reading a contract symbol

A futures symbol has three parts: the product code, a one-letter month code and the last digit of the year. The contract most prop traders are on right now is NQZ6:

The month letters are the same on every CME contract:

The four highlighted months, H, M, U and Z, are the only ones that matter for index futures. Learn those four and you can read almost every symbol a prop trader sees.

Ticks, points and dollars

The tick is the smallest step a price can move. NQ moves in 0.25-point ticks, so four ticks make one point. Each step has a fixed dollar value:

Example: you buy 3 MNQ and sell 25 points higher. That’s 25 × $2 × 3 = $150. The same trade with one NQ makes $500. On a losing trade the same arithmetic runs the other way, which is why prop traders think in dollars per point before anything else.

The point values for the six markets prop traders use most are in the table below, and our position-sizing guide turns them into ready-made sizing grids.

Minis vs micros

CME lists most index, oil and gold futures in two sizes. The E-mini is the standard prop contract. The Micro covers the same market at one tenth of the size: MNQ is $2 times the Nasdaq-100 against NQ’s $20, and it moves in the same 0.25-point ticks.

• Same market, same chart. MNQ and NQ track the same index tick for tick. Only the dollar value changes.
• Finer sizing. On a $2,000 drawdown, one NQ fits a stop of only 10 points at $200 risk. Five MNQ give you the same $200 risk with a 20-point stop.
• Prop limits count them 10:1. Most firms let you swap one mini for ten micros, so “5 minis” usually means up to 50 micros. A few count them differently, so check your firm’s page.
• Fees don’t shrink tenfold. A micro’s commission is a larger share of what it can make, so ten micros usually cost more to trade than one mini.

Margin, leverage and why prop firms use a drawdown instead

A contract’s full value is its notional value: the price times the dollar multiplier. With the Nasdaq-100 at 20,000, one NQ controls 20,000 × $20 = $400,000 of index exposure. With a broker you don’t pay that. You post margin, a good-faith deposit. CME says E-mini S&P 500 futures currently need about 5% initial margin, which is over 20 times leverage.

A prop firm replaces margin with a drawdown limit. You don’t deposit anything. The firm lets you trade a $50K account and ends it if you lose a set amount, usually $2,000 on that size. Here is that $2,000 next to what one NQ controls:

That is the real meaning of leverage on a prop account. The account size is a label. What you can lose is the drawdown. Size every trade against that number, not the $50K, and read our drawdown guide for how trailing and static floors move.

Expiry and rollover

Every contract has a last trading day. Index futures expire quarterly, on the third Friday of March, June, September and December, and settle in cash to the index’s official opening level that day. About eight days before expiry, traders move to the next contract and the old one goes thin. This is called the roll.

Oil and gold work differently, and both are delivered physically, which is why firms and brokers close them before delivery:

• Crude oil (CL) lists every calendar month. Trading in a contract ends three business days before the 25th of the month before delivery, so around the 20th. Volume moves a few days before that.
• Gold (GC) is most active in February, April, June, August, October and December. Traders roll about a week before first notice day, at the end of the month before delivery.

Our trading calendar lists every roll and expiry date through September 2027, and what goes wrong for prop traders that week.

Trading hours

CME’s index and gold futures trade almost 24 hours a day: Sunday 5:00 PM to Friday 4:00 PM Chicago time, with a one-hour break each afternoon from 4:00 to 5:00 PM. That’s where the “day” of a prop account starts and ends. A trade at 6:00 PM Chicago time on Monday counts towards Tuesday.

The session is long, but liquidity isn’t even. Index futures are busiest from the US cash open at 9:30 AM New York time to the close, and around scheduled data releases. Many firms also require you to be flat before the daily close. The trading calendar converts every session time to your own time zone.

The six markets prop traders trade most

What moves each one:

• Nasdaq-100: large US tech stocks and interest-rate expectations. The fastest of the index contracts.
• S&P 500: the broad US large-cap market. The deepest and steadiest of the four.
• Dow: 30 large US blue-chip stocks. Moves in whole points.
• Russell 2000: US small companies, which are more sensitive to borrowing costs.
• Crude oil: supply news, OPEC+ decisions and the weekly US inventory report.
• Gold: real interest rates, the US dollar and risk-off flows.

Oil and gold are quoted in dollars per barrel and per ounce, so their “point” is $1. One CL tick ($0.01) is $10, and one GC tick ($0.10) is also $10.

Symbol decoder and move calculator

Type any of the contracts above as your platform shows it (for example MNQZ6, ESH7, CLF7 or “NQ 12-26”). The decoder tells you what it is, when it expires, and what a move is worth in dollars.

Index expiry and roll dates are calculated (third Friday, roll eight days earlier). Oil and gold dates are approximate, and exchange holidays aren’t counted. Confirm on your platform before roll week.

Five beginner mistakes with futures contracts

1. Trading the old contract after the roll. The chart looks the same but the order book is thin, so every stop slips further. Switch your chart and your order ticket on roll day.
2. Mixing up ticks and points. A “10-tick stop” on NQ is 2.5 points ($50), not 10 points ($200). Check which unit your platform’s bracket order uses.
3. Sizing from the account size. A $50K label with a $2,000 drawdown is a $2,000 account for risk purposes. Size from the drawdown floor.
4. Treating the 23-hour session as a 23-hour opportunity. Overnight liquidity is thin, and many firms require you to be flat before the daily close.
5. Thinking micros are free practice. They are cheaper per trade, but their fees take a bigger share of every winner. Use micros for sizing control, not for overtrading.

Next steps: learn how your account’s floor moves in trailing vs static drawdown, then read how to pass a prop firm evaluation.

Contract terms from CME Group rulebooks (E-mini Nasdaq-100 chapter 359, Light Sweet Crude Oil chapter 200), CME’s gold futures fact card, its E-mini S&P 500 and Micro E-mini course material, and its month-code table, checked 29 Oct 2026. The 20,000 Nasdaq level is a round example, not a quote. Not financial advice.