QQQQ vs NQ

matador04 · Dec 9, 2009

Any major reason why one would want to trade QQQQ over NQ? You get better tax treatment with NQ than you do with QQQQ. Are their correlations ever below .99? Is one slightly more volatile than the other??

thx

TheGoonior · Dec 9, 2009

I can think of a couple:

1) Many IRAs/401ks don't allow futures trading.
2) You can start out trading live with very small lots and scale up as much as you want. This way you can learn and experience the psychology of live trading without having to eat the $20/point of the NQ. Nice transition between paper to live to the actual NQ.

circadian · Dec 9, 2009

Quote from TheGoonior:

I can think of a couple:

1) Many IRAs/401ks don't allow futures trading.
2) You can start out trading live with very small lots and scale up as much as you want. This way you can learn and experience the psychology of live trading without having to eat the $20/point of the NQ. Nice transition between paper to live to the actual NQ.

Exactly, and the lower cost of carry.

Q's/NQ's are poised for a rally...very soon.

dijonyummy · Dec 10, 2009

Do we have to deal with wash sales with NQ?

TheGoonior · Dec 10, 2009

Nope, nor do you report every transaction on your taxes.

matador04 · Dec 10, 2009

Quote from TheGoonior:

I can think of a couple:

1) Many IRAs/401ks don't allow futures trading.
2) You can start out trading live with very small lots and scale up as much as you want. This way you can learn and experience the psychology of live trading without having to eat the $20/point of the NQ. Nice transition between paper to live to the actual NQ.

Thanks for the points.

Do the futures ever trade at a deep discount or premium to q's? Sorry for the dumb questions, but I need to know.

Scataphagos · Dec 10, 2009

Quote from matador04:

Thanks for the points.

Do the futures ever trade at a deep discount or premium to q's? Sorry for the dumb questions, but I need to know.

Sure. Opening gaps.

TheGoonior · Dec 10, 2009

My gut feeling says not enough to be an issue for "normal folks" such as us.
I would think any discrepancy would bring in the arb folks.
Just wagering a guess, though.

matador04 · Dec 10, 2009

Quote from TheGoonior:

My gut feeling says not enough to be an issue for "normal folks" such as us.
I would think any discrepancy would bring in the arb folks.
Just wagering a guess, though.

that's what I figured, but thought I'd ask anyway...

thx all

TheGoonior · Dec 10, 2009

Good point on the opening gap...that was a "forest for the trees" kind of moment, there.

I'm assuming there is not much of a divergence during the normal US trading hours.