Definition. The full market value of the underlying a contract represents: the price multiplied by the contract multiplier.
How it works
For MYM the multiplier is $0.50 per point. With the index at about 52,000 points, one contract's notional value is about $26,000. Profits and losses are calculated on that value, not on the margin.
Example
A 1% move with a notional value of $26,000 is a change of about $260 on one MYM contract.
What to watch out for
The notional value is many times larger than the margin. That's the essence of leverage and the source of risk.
You'll find the full explanation with graphics, examples and exercises in the 🖥️ Order flow atlas space, and its use in the live market in the 🔴 Live Room. Both are available to Club members (in Polish).
