Strategies For Trading Futures

Futures in Your IRA: Synthetically Short /NQ

Strategies For Trading Futures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

James and Pete discuss how we can have partial exposure in the Nasdaq-100 with a synthetic future. The highest leverage exposure to the Nasdaq-100 index is through the futures contract (/NQ). However, the ETF (QQQ) is also highly liquid with tradable options.

QQQ to /NQ Share Equivalency = 822 Shares

Trying to short 800 shares of QQQ to replicate shorting /NQ is not only not permitted in an IRA, but takes nearly 16 times the BPR. Instead of trying to trade something that takes over $50,000 in buying power in a margin account, traders can generate Synthetic Short Stock positions by utilizing options.

Long Put at Strike X + Short Call at Strike X = Short Stock

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