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Nasdaq
100 Index Options & Futures
The number
of securities in the
Nasdaq 100 Index makes it an effective vehicle for investors. In
January 1994, options on the
Nasdaq 100 Index began trading on the Chicago Board Options Exchange.
The Chicago Mercantile Exchange began to trade futures and futures options
on the Nasdaq 100 Index in April of 1996. The Nasdaq
100 Index Tracking Stock (QQQQ)
began trading on the American Stock Exchange in March 1999. In addition,
the Index is used as a benchmark for financial products in many countries
around the world.
E-Mini Nasdaq 100 Futures
E-Mini Nasdaq 100
futures trading contracts are legally binding agreements to buy or sell
the cash value of the Nasdaq 100 Index at a specific future date. The
contracts are valued by multiplying $20 by the futures price. For example,
if the E-Mini Nasdaq 100 futures trading contract is trading at 2100.00,
the value of the contract is $42,000 ($20 x 2100.00).
The minimum price
movement of the futures, or tick, is 0.50 index points or, $10 per contract.
If the futures trading contract moves one tick, from 2100.00 to 2100.50,
a long (buying) position would be credited $10; a short (selling) position
would be debited $10. All futures positions are marked-to-market daily.
Additional deposits into the margin account may be required beyond the
initial balance if your position moves against you. (For an explanation
of the mechanics of, and margin requirements for, futures trading at
the CME, contact your broker).
E-Mini Nasdaq 100
futures are cash settled, just like the standard Nasdaq 100; there is
no delivery of the individual stocks. Likewise, E-Mini Nasdaq 100 daily
settlements and quarterly expirations use the same price as the standard
Nasdaq 100 futures. Identical daily settlement prices allow Mini contracts
to benefit from the liquidity of the Nasdaq 100 futures.
Like the standard
Nasdaq 100 futures, which are settled using a Special opening Quotation
(SOQ), to the same SOQ on the third Friday of the quarterly contract
month. The final settlement price is an SOQ of the Nasdaq Index computed
from a five-minute volume-weighted average of each component stock’s
opening prices on expiration day.
Advantages of Trading
Mini Nasdaq 100 Futures and Options
Trading Mini Nasdaq
100 futures and options offers investors several distinct advantages:
- Exposure
– Investors can gain exposure to the U.S. stock market via the world’s
leading stock index. Although there are many indexes, some very popular,
the Nasdaq 100 is the most closely watched, most actively traded and
most liquid of all futures products based on a stock index.
- Affordability
– The enormous appeal of the standard Nasdaq 100 futures has caused
the contract to grow beyond the reach of many investors. The Mini
Nasdaq 100 contracts allow investors to trade this benchmark index
at a fraction of the cost; Mini Nasdaq 100 futures will require much
less margin than the standard Nasdaq 100 futures.
- Opportunity
– These contracts provide a variety of investment opportunities, such
as: increasing or hedging portfolio exposure; spreading against other
CME index products such as the Nasdaq 100, NASDAQ 100, E-Mini Nasdaq
100, Russell 2000
and/or S&P Mid Cap 400, a cost-efficient way to benefit from rising
or falling equity markets.
- Integrity
– CME customers and members are protected from default on futures
and options contracts by the Exchange’s sophisticated risk management
and surveillance techniques. The CME Clearing House acts as the guarantor
to each of its clearing member, thus ensuring the integrity of all
trades. The CME system has proven to the outstandingly effective,
even under the most stressful market conditions.
The CME is The
Index Exchange, with more than 90% market share of all domestically
traded stock index futures and options on futures. Open interest in
the CME’s index complex
totals in excess of $138 billion, making it the world’s most liquid
trading environment for stock index products.
- Related Links:
-
NASDAQ 100 - NASDAQ 100 index
stock market charts for trading QQQQ and other index derivatives.
-
Stock Market
Directory - Submit your website to one of the most popular stock
market trading directory.
-
Rydex - Rydex and
ProFunds trading signals to trade funds in bull and bear markets. Double the
leverage with dynamic index funds.
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