Average Price Calculating Tool
Professional Trading Tool for Position Averaging Calculations
Futures Reference Table
| Contract | Tick Size | Per Point/Pip Value |
|---|---|---|
| MES (Micro E-mini S&P 500) | $1.25 | $5.00 |
| ES (E-mini S&P 500) | $12.50 | $50.00 |
| NQ (E-mini NASDAQ 100) | $5.00 | $20.00 |
| MNQ (Micro E-mini NASDAQ 100) | $0.50 | $2.00 |
| M2K (E-mini Russell 2000) | $0.10 | $5.00 |
| RTY (Russell 2000) | $5.00 | $50.00 |
| MGC (Micro Gold) | $0.10 | $10.00 |
| GC (Gold) | $10.00 | $100.00 |
| YM (E-mini Dow Jones) | $5.00 | $5.00 |
| MYM (Micro E-mini Dow Jones) | $0.50 | $0.50 |
Trader's Averaging Scenario
- The trader currently holds a
SHORTposition in MES (Micro E-mini S&P 500), initiated at a purchase price of4300. - However, the price has now increased to
4360, resulting in a60-pointmovement against the trader'sSHORTposition. - Given the price per point of
MESat$5as per above table, the trader's current Profit and Loss (PNL) stands at$300(60 points x $5 per point). - The trader is experiencing a loss of
$5for each1-pointincrease in the price because the trader is in theSHORTposition. - With the intention of improving their position, the trader plans to average their trade by adding one more quantity, adding another
1 SHORTquantity. - This adjustment would double the price per point to
$10, meaning that every point's movement will now impact the PNL by$10. - The new average price after averaging the trade position will be
4330, requiring the price to decrease to this level instead of the initial4300for the trader tobreak even. - However, it is crucial to exercise extreme caution when averaging a position, as each added quantity will increase the price per point, thereby amplifying potential losses if the trade moves against the trader further.
Attention: When considering whether to take a Long or Short position on any financial instrument, it is crucial to adeptly compute the average price. Exercise utmost caution during the averaging process, avoiding hasty decisions. Understand that with each quantity added to your position, the price per point will increase. Take the time to evaluate the implications of averaging before proceeding.
