Why is that a bullish position? Because the NQ moves more in dollar-value that the ES? Most of the time that is "barely" true. On a normal trading day, they move darn close in dollar value per point over a range with the proper ratio, so I would consider it a neutral position.
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- Thread starter trader1974
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Why is that a bullish position? Because the NQ moves more in dollar-value that the ES? Most of the time that is "barely" true. On a normal trading day, they move darn close in dollar value per point over a range with the proper ratio, so I would consider it a neutral position.
I was just saying that NQ/ES is a bullish position if traded in equal lots, i.e. 1:1 ratio. It has a positive beta and will generally track ES moves.
Neutral can mean different things with an index spread. It's a cross-hedge so neutrality is in terms of volatility, or in terms of dollar value of the offsetting positions, or a combination of both.
The time frame of the trade, the liquidity of the instruments, and market conditions need to be considered when choosing the size of the exposures.
It's flexible, and can be traded for different reasons (hedging, trading against an open position, etc.).
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