What is notional value?
In one line: Notional value is the full market value a position controls, not the margin you put up. It's price times the number of units the contract or lot covers.
A simple futures example
The micro S&P 500 future, MES, is worth $5 for each index point. Say MES is at 6,000.
Notional value = 6,000 × $5 = $30,000.
The E-mini, ES, is $50 a point. At the same 6,000 that's $300,000 for one contract. The margin to open either is far smaller than the notional value. That gap is the Leverage.
Contract specs change, so check cmegroup.com for the current details.
A simple forex example
One standard Lot of EUR/USD is 100,000 euros. At 1.0850, that's about $108,500 notional.
At the US cap of 50:1, you'd need about $2,170 margin. On a $5,000 account, one standard lot is about 22 times your balance.
| Position | Notional (approx.) |
|---|---|
| 1 micro lot EUR/USD | $1,085 |
| 1 mini lot EUR/USD | $10,850 |
| 1 standard lot EUR/USD | $108,500 |
| 1 MES at 6,000 | $30,000 |
Why it matters
Notional value tells you how big your trade really is. A 1% move in the market moves your position by 1% of the notional, not 1% of your margin.
So a 1% move against one ES contract at 6,000 is $3,000. On a $10,000 account, that's 30% gone. A math example, not a forecast.
A common mistake
Thinking the margin is the size of the trade. "I only put up $1,500" hides a $30,000 or $300,000 position. Losses follow the notional value.
Before a futures or forex trade, work out the notional value and divide by your account. That's your effective leverage ratio. Then size from your stop with the futures tick value calculator or the position size calculator.
Questions
How do you calculate notional value?
Multiply the price by the contract size or units. For futures, that's price × the dollar value per point.
Is notional value the same as what I can lose?
In theory a leveraged position can lose a lot of its notional value, far more than the margin. Your stop and size decide how much you actually risk.
Why do micro futures exist?
They're one-tenth the size of the E-mini contracts, so the notional value and the dollar risk per point are smaller.
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