Futures Trading Glossary: 32 Terms Every Trader Should Know

Electronic mini futures contract on the S&P 500 index. $50 per point multiplier. The most actively traded equity-index futures contract.

Electronic mini futures contract on the Nasdaq 100 index. $20 per point multiplier. More volatile than ES, popular with experienced day traders.

1/10th the size of the ES contract. $5 per point multiplier. Lower margin than ES (some brokers set MES intraday margin as low as $50), which suits small accounts and beginners.

1/10th the size of the NQ contract. $2 per point multiplier. Allows finer position sizing on the Nasdaq.

The minimum price increment for a futures contract. ES tick = 0.25 ($12.50). NQ tick = 0.25 ($5.00).

Capital required to hold a futures contract. Day-trading margin is typically a fraction of overnight (initial) margin.

The quarterly process of switching from an expiring futures contract month to the next active contract. For equity index futures, CME's roll date is the Monday before the third Friday of the expiration month (next: Monday, December 14, 2026).

The price level with the highest traded volume in a given session or volume-profile window. A key magnet for price.

The upper boundary of the price range that contained 70% of session volume. Used as a key resistance/support pivot.

The lower boundary of the value area. Often acts as support during trend days.

A price area with concentrated volume on the volume profile, indicating acceptance and frequent price re-tests.

A price gap with little traded volume. Price typically moves through LVNs quickly when broken.

Running average price weighted by volume, anchored to session open. Often used as intraday fair value.

Real-time order book showing resting bid and ask orders at each price level.

Analysis of executed trades and resting orders (DOM, Time & Sales, footprint, delta) to read short-term supply/demand imbalance.

Candle chart variant that shows the volume traded at each price within each bar, split by bid-side and ask-side activity.

Cumulative difference between volume executed on the ask (buyers) and volume on the bid (sellers). Positive delta = buying pressure.

Difference between the expected price of a trade and the actual fill price, common around news or thin liquidity.

A firm that funds traders with company capital after they pass an evaluation. Profits are split, typically 80-100% to the trader.

A simulated trading account a trader pays to attempt. Hitting a profit target without violating rules earns a funded account.

The percentage of net profits a trader keeps after a prop firm payout. Typical range: 80-100%.

Prop firm rule set that increases position-size or account-size as a trader demonstrates consistent profitability.

Prop firm rule that prevents a single day's profit from exceeding a defined percentage of total profits (e.g. 30%).

The account a prop firm gives you after you pass the evaluation, often a simulated account that pays real payouts (Topstep's Express Funded Account works this way). Profits are paid via a payout cycle.

Former FINRA margin rule: anyone making 4 or more stock day trades within 5 business days in a margin account needed $25,000 in equity. FINRA eliminated it effective June 4, 2026, replacing it with intraday margin rules that brokers may phase in until October 20, 2027. It never covered regular futures, which is why many smaller accounts traded ES/NQ instead.

A max-loss limit that rises with new account highs and locks in profits. Used by Apex and TopStep.

A fixed max-loss limit relative to the starting balance. Does not move with profits. Less common at futures prop firms: FTMO Futures, for example, uses an end-of-day trailing limit.

End-of-day trailing drawdown that only re-anchors at market close, giving more intraday flexibility than real-time trailing.

The maximum loss allowed in a single trading day. Hitting it usually closes the account or pauses trading until the next session.

Ratio of potential reward to defined risk on a trade. A 1:2 R:R means risking 1 unit to make 2 units.

Calculating how many contracts to trade based on account risk and stop distance: (account risk $) / (stop in ticks × tick value).

Forced closure of a position when margin or drawdown rules are breached. Triggered automatically by broker/prop firm.