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