Is this right regarding these index futures?

S

Saltynuts

So I'm looking at the NASDAQ September 2018 futures here.

https://www.marketwatch.com/investing/future/nasdaq 100 futures

They are currently 7,110, with the NASDAQ at 7,526.

Compare that to the DOW futures here:

http://www.cmegroup.com/trading/equity-index/us-index/e-mini-dow.html

DOW September 2018 futures listed at currently 25,266, with the DOW currently at 25,216.

How can this be right? The futures market seems to be predicting a relatively big drop for the NASDAQ, but a very, very small increase in the DOW. Could one not make money by selling the DOW future and buying the NASDAQ future?

I must be missing something obvious.

Thanks!
 
Thanks Robert. I know there is an interest component in there, i.e. like a cost to carry component. But wouldn't that be roughly the same between the two futures? And the dividend component - wouldn't that, all else equal, reduce the value of the DOW future since the DOW pays higher dividends than the NASDAQ? But it is the value of the DOW future that is so much higher than the NASDAQ vis-a-vis current index spot prices.
 
Blame the media (and all of us) for sloppy shorthand.

"The Market" commonly means the Dow Jones Industrial Average, 'Dow30'.
(A pretty meaningless number, but one we still have to carry around with us, so that when someone exhorts, "Wow! The Market jumped 200 pts today! You must be [pleased, happy, pained, bumming....]!" we can have an informed reply besides the bewildering "I don't watch that." o_O )

"The NASDAQ" commonly means The NASDAQ Composite.
(Which includes a vast amount of noise. o_O)
"The NASDAQ100" is the top 100 of the Composite.
(Which trades 24 hours, and actually merits attention. :) )

And then you through in futures, options, options-on-futures, e-Minis, blah blah blah.
It gets a little confusing.

So!
The Composite is camped out at 7,500 right now, with the NDX at 7070.
It's been a 400 pt difference for a while, so -- a good number to keep in the back of your mind.....:D
 
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Looks like NASDAQ 100 spot is 7069 currently. So the future is priced slightly above current spot, much like the DOW futures. All is right with the world again. :) Thanks!
 
tommcginnis said:
Blame the media (and all of us) for sloppy shorthand.

"The Market" commonly means the Dow Jones Industrial Average, 'Dow30'.
(A pretty meaningless number, but one we still have to carry around with us, so that when someone exhorts, "Wow! The Market jumped 200 pts today! You must be [pleased, happy, pained, bumming....]!" we can have an informed reply besides the bewildering "I don't watch that." o_O )

"The NASDAQ" commonly means The NASDAQ Composite.
(Which includes a vast amount of noise. o_O)
"The NASDAQ100" is the top 100 of the Composite.
(Which trades 24 hours, and actually merits attention. :) )

And then you through in futures, options, options-on-futures, e-Minis, blah blah blah.
It gets a little confusing.

So!
The Composite is camped out at 7,500 right now, with the NDX at 7070.
It's been a 400 pt difference for a while, so -- a good number to keep in the back of your mind.....:D
More...


Tommy, why would you say the 400 pt difference between NASDAQ composite and 100 is a good number to keep in the back of my mind? Isn't it kind of irrelevant as they are just index prices? Thanks!
 
Saltynuts said:
Tommy, why would you say the 400 pt difference between NASDAQ composite and 100 is a good number to keep in the back of my mind? Isn't it kind of irrelevant as they are just index prices? Thanks!
More...

Because what is commonly heard/discussed/quoted is the DOW and the COMP, while what is more commonly used by those actually in the markets are the S&P and the NDX. Knowing the difference can save you many :wtf:-moments.

(Try another one: For many months now, it's been helpful to take the DOW and divide by 10 to get the (rarely-quoted) S&P.
348pts pop today in the DOW.
36pts pop in the SPX.

And there ya go. :cool: )
 
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