5 Markets, 5 Tick Sizes: Bursa Stocks, US, Forex, Soy & FCPO

•By Wan Mahersaham
5 Markets, 5 Tick Sizes: Bursa Stocks, US, Forex, Soy & FCPO
Artikel ini juga tersedia dalam Bahasa Melayu
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Many Malaysian retail investors start with Bursa Malaysia, then discover US stocks, forex, or futures like FCPO or soybean (ZS). But one fundamental confusion always arises: "Why does price move by this amount? Why does the bid increase by 0.5 sen but forex moves 0.0001? Why does one FCPO tick equal RM25?"

Short answer: every market has a different tick size. Tick size (also called "minimum bid", "bid increment", "minimum price increment", or "pip" in forex) is the smallest price movement allowed in that market. It's not random - it's set by the exchange or regulator to balance liquidity, bid-ask spread, and transaction costs.

In this article, we compare tick sizes across five major markets that Malaysian investors commonly trade: 1. Bursa Malaysia stocks (equity) 2. US stocks (NYSE, NASDAQ) 3. Forex (EUR/USD, USD/JPY, other major pairs) 4. Soybean Futures (ZS) - CBOT Chicago 5. FCPO - Crude Palm Oil Futures Bursa Malaysia Derivatives

We'll show: - Actual tick size for each market (quick reference table) - Tick value in original currency (how much you gain/lose per 1 tick) - Why tick sizes differ - not coincidental, there's logic - Implications for your trading strategy

Basic Concept: What Is Tick Size?

Before we dive into each market, understand the foundation first.

Tick size = the smallest price movement officially allowed in a particular market. It's set by: - The exchange (e.g. Bursa Malaysia, NYSE) or - Market regulator (e.g. SEC US, Securities Commission Malaysia)

Tick value = how much you gain/lose in actual currency for 1 tick movement.

Simple examples: - Stock A priced at RM2.50 with 1 sen tick. You buy 1,000 units (1 lot). 1 tick = RM10 gain/loss. - EUR/USD at 1.0850 with 0.0001 tick (1 pip). You trade 1 standard lot (100,000 units). 1 pip = $10 USD.

Why does tick size matter? 1. Defines minimum bid-ask spread - market makers can't quote spread smaller than 1 tick 2. Implicit transaction cost - larger tick = wider spread = higher cost 3. Liquidity level - well-set tick balances liquidity provider profit and fair pricing for investors 4. Trading strategy - scalpers need small ticks; long-term investors are unaffected

Now let's tackle each market.

Visual comparison of tick sizes across 5 major markets - Bursa Malaysia, US stocks, Forex, Soybean futures CBOT, FCPO Bursa Derivatives
Tick sizes differ significantly across 5 major markets - from 0.5 sen on Bursa Malaysia to 0.00001 (pipette) on forex. Each market is designed for specific liquidity and volatility profiles.

Market #1: Bursa Malaysia Stocks (Equity)

Bursa Malaysia uses a tier system for tick size - higher stock price means larger tick. This avoids situations where expensive stocks jump too frequently because 1 sen becomes "negligible" at RM100.

Per Bursa Malaysia's minimum bid schedule updated in 2018:

Stock Price (RM) Tick Size Approx Tick Value (1,000 unit lot)
Less than 1.00 0.5 sen RM5
1.00 - 2.99 1.0 sen RM10
3.00 - 4.98 2.0 sen RM20
5.00 - 9.95 5.0 sen RM50
10.00 - 24.90 10.0 sen RM100
25.00 - 99.90 25.0 sen RM250
100.00 and above 50.0 sen RM500

Practical Examples:

  • MAYBANK (1155) at RM10.50 - 10 sen tick. Buy 1,000 units, 1 tick = RM100.
  • KLK (2445) at RM22 - 10 sen tick. Buy 1,000 units, 1 tick = RM100.
  • AEONCR (5139) at RM6.50 - 5 sen tick. Buy 1,000 units, 1 tick = RM50.
  • OPPSTAR (0275) at RM0.76 - 0.5 sen tick. Buy 5,000 units (5 lots), 1 tick = RM25.

Important Notes:

  • Board lot = 100 units on Bursa (previously 1,000 - reduced in 2018 for retail access democratization).
  • Penny stocks (RM0.005 - RM0.99) have 0.5 sen tick - 1 tick movement = 1-10% drop for stocks RM0.05-RM0.50. This is why penny stocks are volatile.
  • Large tick size (10 sen on RM10+ stocks) means bid-ask spread can be "wide" - higher round-trip cost.

Market #2: US Stocks (NYSE, NASDAQ)

The US market uses flat tick size with exceptions. Compared to Bursa Malaysia's 7-tier structure, US is simpler.

Per SEC Rule 612 of Regulation NMS:

Stock Price (USD) Tick Size Notes
Less than $1.00 $0.0001 (sub-penny) For OTC pink sheets, penny stocks
$1.00 and above $0.01 (penny) Normal NYSE/NASDAQ stocks

Major Change: SEC Rule 612 Amendment 2024

In November 2025, the SEC implemented an amendment introducing a half-penny tick ($0.005) for highly liquid stocks:

  • Stocks with Time-Weighted Average Quoted Spread (TWAQS) ≤ $0.015 over a 3-month evaluation period get $0.005 tick
  • Primary exchanges (NYSE/NASDAQ) set tick size every 6 months
  • Less active stocks remain at $0.01

Practical Examples:

  • NVIDIA (NVDA) at $145 - $0.01 tick. Buy 100 shares (1 US lot), 1 tick = $1.
  • TSLA at $250 - $0.01 tick (if doesn't qualify half-penny). 100 shares, 1 tick = $1.
  • Apple (AAPL) at $180 with very tight spread - likely qualifies for $0.005 tick after Nov 2025. 100 shares, 1 tick = $0.50.
  • OTC penny stock at $0.50 - $0.0001 tick. 1,000 shares, 1 tick = $0.10.

Important Notes:

  • Sub-penny execution allowed - even though quoting tick is $0.01, dealers can execute trades at sub-penny prices ($0.005, $0.001, etc.) through midpoint pricing or price improvement.
  • No board lot in US - you can buy 1 share (except broker minimum). But market makers quote in 100-lot (round lot).

Market #3: Forex (EUR/USD, USD/JPY, etc.)

Forex is fundamentally different from stocks - not exchange-traded. It's a decentralized OTC market. There's no "official" tick size - but each broker sets the smallest tick updated to their platform.

Pip vs Pipette Concepts:

Pair 1 Pip 1 Pipette (1/10 pip) Modern Broker Tick Size
EUR/USD 0.0001 0.00001 0.00001
GBP/USD 0.0001 0.00001 0.00001
USD/JPY 0.01 0.001 0.001
AUD/USD 0.0001 0.00001 0.00001
USD/CHF 0.0001 0.00001 0.00001

Per BabyPips Forex Education, "pip" is the standard unit - but since 2007-2010, most brokers quote with 5 decimals (3 decimals for JPY pairs), allowing 1-pipette ticks.

Pip Value Based on Lot Size:

Lot Size Units Pip Value (EUR/USD)
Standard Lot 100,000 $10 per pip
Mini Lot 10,000 $1 per pip
Micro Lot 1,000 $0.10 per pip
Nano Lot 100 $0.01 per pip

Practical Examples:

  • Buy EUR/USD at 1.08500, exit at 1.08550 = 5 pips (50 pipettes)
  • Trade 1 standard lot ($100,000) = 5 × $10 = $50 profit
  • Trade 1 mini lot ($10,000) = 5 × $1 = $5 profit
  • USD/JPY from 155.50 to 155.60 = 10 pips (100 pipettes)

Important Notes:

  • Common forex spread: 0.5-2 pips for major pairs (EUR/USD, GBP/USD)
  • No single regulator: each broker sets their own ticks - choose a regulated broker (FCA UK, ASIC Australia, SC Malaysia for futures)
  • For Muslims: conventional spot forex has Shariah issues (riba, gharar). Consider Islamic forex accounts or avoid entirely.

Market #4: Soybean Futures (CBOT ZS)

Soybean futures are one of the most popular global commodity contracts, traded on the Chicago Board of Trade (CBOT) - part of CME Group.

Per official CBOT specs and Barchart:

Item Value
Symbol ZS
Contract Size 5,000 bushels
Quote Unit Cents per bushel
Tick Size 1/4 cent = $0.0025 per bushel
Tick Value $12.50 per contract
Point Value $50.00 per 1 cent movement
Contract Months Jan, Mar, May, Jul, Aug, Sep, Nov

Practical Examples:

  • Soybean trading at 1,250 cents per bushel ($12.50 per bushel)
  • You open 1 long contract (buy)
  • Price rises 1 cent (4 ticks) to 1,251 = $50 profit
  • Price falls to 1,245 = 5 cents × $50 = $250 loss
  • Price rises to 1,300 cents (50-cent gain) = $2,500 profit per contract

Important Notes:

  • Notional contract value is huge: 5,000 bushels × $12.50 = ~$62,500 per contract
  • Margin requirement at broker typically $3,000-5,000 per contract (~12-20x leverage)
  • Daily move can be large: limit +/- 70 cents = potential $3,500 per contract
  • Mini-soy (MZS) exists for smaller size: 1/10 standard (500 bushels), tick value $1.25

Market #5: FCPO (Crude Palm Oil Futures - Bursa Malaysia Derivatives)

FCPO is the global benchmark for palm oil prices. Traded on Bursa Malaysia Derivatives Berhad (BMD).

Per Bursa Malaysia official specs and Bursa Academy:

Item Value
Symbol FCPO
Contract Size 25 metric tons (mt)
Quote Unit RM per metric ton
Tick Size RM 1 per metric ton
Tick Value RM 25 per contract
Contract Months Monthly, up to 24 months
Trading Hours 10:30 AM - 12:30 PM, 2:30 PM - 6:00 PM (night session: 9:00 PM - 11:30 PM)
Shariah-Compliant YES (certified by SAC SC Malaysia)

Practical Examples:

  • CPO trading at RM4,200 per metric ton
  • You open 1 long FCPO contract
  • Price rises to RM4,210 (10 ticks) = RM250 profit
  • Price falls to RM4,180 (20 ticks) = RM500 loss
  • Bull run from RM4,200 to RM4,500 = 300 ticks × RM25 = RM7,500 per contract

Important Notes:

  • Notional contract value: 25 mt × RM4,200 = ~RM105,000 per contract
  • Initial margin typically RM5,000-8,000 per contract (~13-21x leverage)
  • Shariah-compliant - no riba, controlled gharar. Suitable for Muslim investors looking to hedge or speculate on halal commodities.
  • MSPO certification for physical delivery since 1 April 2021 - ensures sustainability standard.
  • For CPO cycle context and plantation investment implications, read our article on plantation stocks.

Quick Comparison Table: 5 Markets

For quick reference:

Market Tick Size Tick Value (1 contract/lot) Notional/Lot Liquidity Level
Bursa MY equity (RM3 stock) 2 sen RM2 (1 board lot 100 units) RM300 Medium-High
US equity ($150 stock) $0.01 $1 (100 shares) $15,000 Very high
Forex EUR/USD 0.00001 (pipette) $0.10 (1 standard lot) ~$108,500 Highest globally
Soy futures ZS 1/4 cent $12.50 ~$62,500 High
FCPO RM1 per mt RM25 ~RM105,000 Medium (regional)

Why Are Tick Sizes Different? The Design Logic

Tick sizes aren't random - they're set to balance several interests:

1. Liquidity vs Spread Cost

Smaller tick = more quote levels = more granular price discovery, but market makers earn less per spread = they quote less = liquidity may decline.

Larger tick = market makers earn clearer profit = they actively quote = high liquidity, but retail traders pay more per round trip.

2. Asset Volatility Character

  • Penny stocks (RM0.05-RM0.99): a 0.5 sen movement is already significant percentage-wise. Smaller tick doesn't make sense.
  • Blue chip stocks (RM10+): a 10 sen movement is still ~1% movement. Appropriate.
  • Forex major pairs: typical daily movement 50-150 pips. Pipette ticks (0.00001) allow high precision.
  • Commodity futures: volatile - tick is set proportional to contract size so financial impact per tick is reasonable ($12.50 for soy, RM25 for FCPO).

3. Regulatory Philosophy

  • SEC US: priority is investor protection + market quality. Rule 612 amendment 2025 reduces spread for already-liquid stocks (saving retail cost).
  • Bursa Malaysia: priority is liquidity boost for emerging market. The 2018 tier schedule aimed for retail access democratization.
  • CME/CBOT: priority is trader experience + price discovery. Fixed tick because contract design is single-product, not tiered.
  • Forex: no single regulator - broker competition drives smaller ticks to attract traders.

4. Trading Strategy Compatibility

  • Scalper (5-20 ticks per trade): needs small tick and tight spread. Forex EUR/USD is perfect.
  • Day trader (5-30 minute holds): moderate tick OK. Bursa MY equity, US equity.
  • Swing trader (3-10 days): tick size doesn't matter much as long as spread is reasonable.
  • Position trader (months-years): tick size is nearly irrelevant.

Implications for Malaysian Retail Investors

How does this affect you? Some practical points:

1. Bursa Malaysia: Compare Tick Cost with Commission

For penny stocks (<RM1), 0.5 sen tick = 0.5-5% movement depending on price. Plus brokerage minimum RM7-RM12 per trade. Round-trip cost can be 5-10% on a RM0.10 stock. This is why penny stocks are hard to profit from even when price rises.

2. US Stocks: Low Tick Cost, But Forex Cost

US stock $0.01 tick on a $100 stock = 0.01% movement. Very efficient. But MYR-USD conversion every deposit/withdrawal incurs FX cost 0.5-1.5%. For frequent traders, forex cost can outweigh low-tick benefits.

3. Forex: Spread Matters More Than Tick

Because pipette ticks are too small, focus on spread instead: - EUR/USD: 0.5-1.5 pips spread = $5-15 per standard lot per round trip - Choose brokers with ECN account or raw spread + flat commission

4. FCPO: Shariah-Compliant + High Leverage

FCPO is one of the best Shariah-compliant derivatives for Malaysian Muslim investors. RM5,000 can control a RM100,000+ value contract. But high leverage means 1-2 day movements can wipe out margin - risk management is critical.

5. Soybean: Expensive & Volatile

$62,500 notional value per contract + $12.50 tick value + daily moves can be $1,000-3,000. Suitable for experienced traders with >$20,000 capital. Small retail investors should consider MZS (micro-soy) with $1.25 tick value.

How to Calculate Tick Cost Yourself

Generic formula for minimum trade cost estimate:

Minimum cost (1 tick spread)=Tick Value×Your Lot+Round-Trip Commission\text{Minimum cost (1 tick spread)} = \text{Tick Value} \times \text{Your Lot} + \text{Round-Trip Commission}

Example: - Bursa OPPSTAR at RM0.76, buy 5,000 units - Tick = 0.5 sen, tick value for 5,000 units = RM25 - Mahersaham (RHB) commission ~RM7 buy + RM7 sell = RM14 - Minimum cost to break-even = RM25 (1 tick spread) + RM14 = RM39 - Stock needs to rise ~0.78 sen (about 1 tick) to break even - reasonable

Compare with expensive stock: - MAYBANK at RM10.50, buy 100 units (1 minimum board lot) - Tick = 10 sen, tick value = RM10 - Commission ~RM14 round-trip - Minimum cost = RM10 + RM14 = RM24 - Stock needs to rise 24 sen (~2.3%) to break even

This is why most retail traders prefer mid-range stocks RM1-RM5 - balancing tick size and brokerage cost.

FAQ: Common Questions

1. What's the difference between "tick", "pip", "minimum bid"?

Same concept, different terminology: - Tick - universal term for minimum price movement in any market - Pip - specific to forex (1 pip = 0.0001 for EUR/USD, 0.01 for JPY pairs) - Minimum bid or bid increment - Bursa Malaysia terminology for stock tick - Tick size - common terminology in futures and commodities

2. Why is Bursa tick value different by price?

Bursa's tier system is designed so each tick's financial impact is proportional to stock price. A 10 sen tick on RM10 stock = 1% movement. A 50 sen tick on RM100 stock = 0.5% movement. Without tiering, expensive-stock investors would lose too quickly to small movements.

3. Is the US half-penny tick (0.005) already active?

Active from November 3, 2025. But only for qualifying stocks (TWAQS spread $0.015 or less). Active names like AAPL, MSFT, GOOGL likely qualify - check at SEC Rule 612 amendment or primary exchange.

4. Forex has no regulator - how do I know a broker is reliable?

Look for brokers with tier-1 regulators: - FCA (UK) - ASIC (Australia) - CySEC (Cyprus, EU-passport) - SEC/CFTC (US - very strict)

For Malaysia, SC Malaysia licenses only derivatives (FCPO, KLIBOR, etc.), no Malaysia license for spot forex. Consider IBKR, OANDA, or Saxo with multiple tier-1 regulators.

5. FCPO is Shariah-compliant - can I trade without worry?

Yes, FCPO is certified Shariah-compliant by SC Malaysia's Shariah Advisory Council. You can trade with peace of mind from the Shariah perspective. But from a risk perspective, 10-20x leverage means you can lose capital fast - approach with disciplined risk management.

6. Soybean futures - do I need a US broker account?

Yes - you need a broker with access to CME Group (CBOT). Examples: IBKR, TD Ameritrade, Tradovate. Margin requirement $3,000-5,000 per contract. For Malaysia, requires USD wire transfer and tax reporting declarations beyond thresholds.

7. I want to scalp - which market suits best for tick size?

For scalping (5-20 tick movements per trade): - Forex major pairs best - tight spread (0.5-1 pip), pipette precision - US equity high-volume (SPY, QQQ, AAPL) - $0.01 tick OK, but spread varies by session - Bursa MY equity - hard to scalp due to large relative tick and expensive brokerage per trade

8. When does tick size change?

Exchanges can change tick size: - Bursa Malaysia: last changed 2018 - SEC US: latest amendment effective November 2025 - CME: fixed since contract design - rarely changes - Forex broker: can adjust spreads daily, but tick (pipette) is static

Investors must follow exchange announcements for updates.

Conclusion

Understanding tick size is a basic skill many retail investors miss. The five major markets we compared - Bursa Malaysia stocks, US equity, Forex, Soybean Futures, and FCPO - have very different tick structures, reflecting product design, regulator philosophy, and liquidity provider type. Choose the market that suits your capital, strategy, and time horizon, and always calculate real costs (tick + spread + commission) before executing.

Before making any trade, ensure you have an account enabling access to the market you wish to trade.

To start investing in Bursa Malaysia (equity & FCPO) and overseas markets like the US and Hong Kong, you need a CDS account - register your CDS account with Mahersaham here.

For stock investing fundamentals including how to read financial statements, understanding tick size and portfolio risk management strategies, get our free stock investing fundamentals ebook.

Further Reading