Strategies For Trading Futures

Futures in Your IRA: Synthetically Short /NQ

Strategies For Trading Futures

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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