Futures Trading Glossary
By Ethan Warmuskerken · 6 min read
Use this futures trading glossary to understand tick value, margin, rollover, order types, drawdown, consistency, payout caps, and platform terms.
This glossary covers the essential terminology every futures trader should know before entering an evaluation or funded program.
A standardized agreement to buy or sell an asset at a future date.
The index or commodity a contract represents (such as NASDAQ, S&P 500, crude oil, gold).
The minimum price increment a futures contract can move.
A full price unit, usually made up of multiple ticks.
The dollar amount gained or lost when price moves one tick.
The dollar amount gained or lost when price moves one full point.
The capital required to open a futures position.
Amount required to enter a position.
Minimum balance required to keep the trade open.
Exposure gained relative to capital required. Futures are naturally leveraged.
The final trading date for a futures contract.
Switching from a contract nearing expiration to the next active month.
CME Group's electronic trading system for most futures products.
A mid-sized futures contract (example: ES, NQ, YM).
A contract that is one tenth the size of the mini version (MES, MNQ, MYM).
How easily a contract can be bought or sold without large slippage.
How fast and how far price moves.
Difference between intended entry price and actual fill.
Execution of an order.
An exit order to limit downside risk.
A limit order to automatically exit at a target level.
In a prop firm, violating a rule such as maximum drawdown, contract limit, or daily loss.
Increasing contract size once certain profit thresholds are hit.
The difference between peak equity and current equity.
Core terms
Tick, point, contract, margin, bid, ask, spread, limit order, stop order, market order, session, expiration, and rollover are foundational futures terms.
Risk terms
Maximum loss level, drawdown, consistency, payout cap, withdrawal buffer, realized P&L, and unrealized P&L are essential for prop firm trading.
Platform terms
Watchlist, bracket order, OCO, flatten, position, fill, and DOM are platform terms traders should understand before trading live speed.
Key takeaways
- Know tick value before sizing.
- Understand contract codes and expiration.
- Use order terminology precisely.
Ready to compare account rules? Review PropEd Capital's current futures funding paths, drawdown rules, contract limits, and payout structure on the plans page.