How do NQ and QQQ track so closely?

[schizo]

Okay, "algos" sure. But you've got different sets of people trading each. Not everybody who buys in and out of QQQ is also in the futures market. You might get some huge order in the one that ain't equally placed in the other. So how the hell do they stay so synced?

As others already mentioned above, there are arbs trading on both side. As soon as these bots detect a "huge order" on one side, they will place corresponding order to match it on the other end. This happens until both sides are back in equilibrium.

But you need to understand that QQQ and NQ are merely shadowing the underlying index: NDX. NDX is also made up of 100 stocks. So you not only have arbs configured for NQ and QQQ. They will also be tied to those 100 stocks as well.

 

[Dollardogs]

As others already mentioned above, there are arbs trading on both side. As soon as these bots detect a "huge order" on one side, they will place corresponding order to match it on the other end. This happens until both sides are back in equilibrium.

But you need to understand that QQQ and NQ are merely shadowing the underlying index: NDX. NDX is also made up of 100 stocks. So you not only have arbs configured for NQ and QQQ. They will also be tied to those 100 stocks as well.

Gotcha. Thanks! Sounds like for the foreseeable future, I can keep using QQQ as my NQ signal system then with an acceptable amount of slippage. Hope so. Like I said, it will make my transition to futures go way smoother if I don't have to start thinking of everything in terms of 42.85 all of a sudden.

 

[SunTrader]

That sorta makes sense. So if I'm understanding you're basically saying the syncing is consciously executed and monitored to prevent arbitrage opportunities, but why do the HFT guys care? I don't get what the interest in keeping them aligned stems from.

You don't seem to fully understand what arb'ing means?

Because if you did you would not say it sorta makes sense or anything about syncing.

 

[murray t turtle]

I'm currently trading QQQ while getting ready to switch eventually to NQ. Does anyone know how the two track so closely? It looks like a $1 move in QQQ corresponds to about a 42.5 point move in NQ. I'm curious how that happens and how dependable that is longterm, because all of my strategies are tied to very specific QQQ price moves, and if I can switch to futures, while still using QQQ for my entry and exit signals, that would be easier. Thanks in advance for any info!

%%
Amazing close trackin' except;
i noticed QQQ tend$ to do a bit better, or better like 1999...........................................[Delayed Edit\ was refering to the NQ 100/ +NQ cash composite in IBD /Stock Traders Almanac+ QQQ]
I see now question is in SIF section LOL

 

[Sekiyo]

Interesting, where you getting 36.75 from? I'm a day trader on the 5 min chart. Every 5 min candle I've compared it's more like 42.

Ticker ... 52W High ... 52W Low ... Difference
NQ ... 18,144.75 ... 12,443.00 ... 5701.75
QQQ ... 440.59 ... 285.19 ... 155.4

5701.75 / 155.4 = 36.69
Or 36.75, rounded to the nearest 1/4th

Agree, It's a rough approximation.

 

[Concinnity]

@Sekiyo @Dollardogs

Neither of you have the correct math. Not sure if it's because of roll over or QQQ not trading 24/7 so your highs/lows don't align or if you are / aren't counting in the ETF management fee, but if you're charting NQ and day trading QQQ than the below is the correct math:

1 Dollar QQQ move = 40 NQ points

or

every 2.5 cents of QQQ = 1 point of NQ

Because 800 shares of QQQ is equivalent to 1 NQ Mini.

40 NQ points x $20.00 per point = $800.00

1 QQQ Dollar x 800 shares of QQQ = $800.00

 

[Overnight]

@Sekiyo @Dollardogs

Neither of you have the correct math. Not sure if it's because of roll over or QQQ not trading 24/7 so your highs/lows don't align or if you are / aren't counting in the ETF management fee, but if you're charting NQ and day trading QQQ than the below is the correct math:

1 Dollar QQQ move = 40 NQ points

or

every 2.5 cents of QQQ = 1 point of NQ

Because 800 shares of QQQ is equivalent to 1 NQ Mini.

40 NQ points x $20.00 per point = $800.00

1 QQQ Dollar x 800 shares of QQQ = $800.00

Who the fuck cares? Are you guys being dipshit enough to not go long one or the other because of an arb issue you cannot capture?!?!

Oy!

Pretty sure I have a song for that, and I'm pretty sure nobody wants to hear it.

 

[Concinnity]

Who the fuck cares? Are you guys being dipshit enough to not go long one or the other because of an arb issue you cannot capture?!?!

Oy!

Pretty sure I have a song for that, and I'm pretty sure nobody wants to hear it.

Why do you and others have such issues with giving proper information, no one on this forum can even give the correct math and no one else points it out. I give factual information and you take offence to it? Why? What am I missing about this forum? Is this just simply for everyone to troll and see who can steal the most emotional capital from others or get the most entertainment.

So you don't call out the post with incorrect math, just the one with the correct information annoys you? Brilliant.

 

[Overnight]

Why do you and others have such issues with giving proper information, no one on this forum can even give the correct math and no one else points it out. I give factual information and you take offence to it? Why? What am I missing about this forum? Is this just simply for everyone to troll and see who can steal the most emotional capital from others or get the most entertainment.

So you don't call out the post with incorrect math, just the one with the correct information annoys you? Brilliant.

It is not a dig on your math, man. It is a dig on your attitude, coming from someone who started this journey in futures 10 years ago this year.

My anger is not directed at you. But is directed at the details, and that caused me to miss out on opportunity.

Stop focusing on the differences between QQQ and NQ and NDX.

You'll lose more profit than you know trying to determine the devil in the details, rather than embreacing the fact that they are both soaring north.

 

[Concinnity]

It is not a dig on your math, man. It is a dig on your attitude, coming from someone who started this journey in futures 10 years ago this year.

My anger is not directed at you. But is directed at the details, and that caused me to miss out on opportunity.

Stop focusing on the differences between QQQ and NQ and NDX.

You'll lose more profit than you know trying to determine the devil in the details, rather than embreacing the fact that they are both soaring north.

It's possible I have one of the best overall attitude on the entire site. I actually intra-day trade actively everyday and take a capitalistic approach aligned with understanding the best outcomes generally come from an equal value exchange between parties. Openly offered countless times to interact with people, trade with them, willing to learn things, willing to teach things and etc.

You assume I am worried about some relationship between NQ and QQQ. Is it not possible, maybe even probable that I am just making sure they know the correct relationship for intra-day trading? If you're charting one but trading the other wouldn't it be helpful to have the correct correlation? Please don't claim it's irrelevant or you can't fathom a scenario where it matters and make me list one.

Telling me to embrace that? I am the one that repeats ad nauseam that major US equities are natural bullish bias (not that it's some big secret, it's obvious). Most people get it by now peoples advantages are account size / position size, time and the natural bullish bias of major US equities. Barely anyone here can actually intra-day trade at a high level, hence why people are almost scared to death to interact on voice during real time trading hours, because they have no other edge, some of them are too ignorant to even believe it's possible to have an edge outside of what I listed.

So, that's the reasoning as to why I don't understand you talking to me about markets soaring north, nor about you saying I shouldn't give someone the actual correct math correlation.