Why do Futures Traders Love Trading NASDAQ (NQ)

5/22/2025, 11:25:11 AM

Why do Futures Traders Love Trading NASDAQ (NQ)

Futures trading has become popular over the years due to its convenience over trading stocks. Futures contracts cover different assets like commodities, stock indexes, and currencies. Many benefits come with trading the futures instead of the actual asset. This article will look at some of the reasons why traders love trading NASDAQ futures.

The NASDAQ futures is a financial contract that allows traders to participate in the price movements of the Nasdaq-100 index. With this contract, you opt to buy or sell the index in the future at a specific price.

The NASDAQ futures can be traded as a mini or a micro contract. Mini contracts are bigger than micro contracts. Therefore, micro contracts are cheaper, making them accessible to most retail traders.

High Volatility

The NASDAQ futures track price movements in the Nasdaq-100 index. This index is known to be quite volatile as it averages the price of major tech companies. Therefore, there is an opportunity for larger price movements. This can be quite attractive as it offers traders the opportunity to make bigger earnings quickly.

However, professional traders know the importance of managing risk, especially in volatile markets. Volatility can work against you if you do not manage risk.

Liquidity

Another reason why NASDAQ futures are attractive is the liquidity. The futures market is highly liquid, meaning there is a large number of traders available at any given time. Therefore, entering and exiting trades is easy and can be done in the shortest time possible. Liquidity allows traders to quickly exit poor trades.

Longer Trading Times

Normally, the Nasdaq-100 index is only open during US market hours. Therefore, in a day, traders only get six and a half hours to trade the index. On the other hand, in the futures markets, the NASDAQ is open twenty-four hours a day, five days in a week.

That means more trading time. Therefore, traders can take advantage of trading opportunities that arise when the US markets are closed during the weekdays.

Access to Top Tech Companies

The underlying asset for NASDAQ futures is the Nasdaq-100 index. The index is sometimes called the Tech 100. It comprises some of the major US tech companies like Apple, Nvidia, and Microsoft.

Tech stocks have performed well in recent years with developments in Artificial Intelligence. What better way to get access to the moves in the tech industry than through NASDAQ futures?

Leverage

Another attractive point for NASDAQ futures is leverage. In the futures market, traders must only provide the margin, depending on the platform they use. The rest is covered by leverage. This means you will risk much less than someone who is trading the actual asset with little or no leverage.

Leverage offers traders the opportunity to make so much more than they would have made with their own capital. However, with bigger earnings come bigger losses. Therefore, it is important to manage risk well when using this tool.

Speculation and Hedging Opportunities

NASDAQ futures not only offer traders the opportunity to speculate on the Nasdaq-100 index price movements but also to hedge. Traders whose portfolio has a lot of the Nasdaq-100 stocks can use the NASDAQ futures to hedge against wild price movements in the future. Hedging is a way of reducing your exposure to risk.

How to Start Trading NASDAQ Futures

After going through the benefits of trading NASDAQ futures, the next step is to start your own journey. To do this, follow the simple steps below.

Learn and Gain Skills in Futures Trading

The first step is to gain the knowledge and skills for trading NASDAQ futures. Nowadays, you can find most of the information you need on the platform you want to work with. For instance, with NinjaTrader, you can get access to a wide range of educational resources, with some specifically covering NASDAQ futures.

Develop or Find a Strategy

After learning and gaining skills, the next step is to develop or find a suitable strategy for trading. There are many strategies available online that you can use as a foundation for your own strategy. A good strategy should show you the market conditions before entering and exiting a trade. It should also include risk management tools and techniques to ensure you survive in the markets.

After developing a strategy, you can backtest it to ensure it makes a profit in the long run.

Choose a Platform for Futures Trading

Here, you can use the same platform you used for education on futures. Other great platforms for futures trading include TradingView and Tradovate. The platform you choose should suit your style of trading.

Start with Paper Trading

After choosing your platform, take the time to familiarize yourself with futures trading and your strategy. To do this, you can focus on paper trading for some time. Paper trading will allow you to build the confidence you need to apply your strategy to the real markets. Additionally, you will get familiar with how the platform works and how the NASDAQ futures market moves. All these will improve your performance when you finally dive into real trading.

Start Trading

After a few months of paper trading, you are ready to jump into real trading. At this point, you have to consider how much money you have for trading. With FunfingTicks, traders can get funding of $50,000 for just $125/month.

All you have to do is go through an evaluation phase to prove that you can grow your account. When you pass the challenge, you get funding. As a funded trader, you do not pay any more fees. Instead, you get a profit of 90%.

Moreover, you can use platforms like TradingView, Ninjatrader, and Tradovate. With funding, you can trade NASDAQ futures with very little risk on your part.