Updated: Jan 29
What are E-Mini Nasdaq-100 (NQ) Futures? The E-Mini Nasdaq-100 (NQ) offers the chance for traders with smaller account sizes to trade futures of the Nasdaq-100 Index. The NQ is traded on the Chicago Mercantile Exchange. The futures of the E-mini Nasdaq are one-fifth the size of regular NASDAQ contracts with one tick starting at $5.00 (0.25) and making the NQ $20.00 per point. The Mini Nasdaq is a great option for a smaller/beginner trader and many experienced traders prefer it for several reasons.
E-Mini NQ 100 Highlights
Low tick cost- One of the most attractive aspects of the NQ is the $5.00 tick/$20.00point. This lets traders with small accounts trade comfortably.
High Volume/Good liquidity: The E-mini Nasdaq 100 (NQ) is one of the most popular E-mini contracts. This means that the market gives you plenty of opportunities to take profit and the high liquidity means you can enter/exit without having a large impact on the market price.
Fair trading: The ES is traded on the Globex platform which gives retail traders with smaller accounts a fair chance at trading the market. Trades placed on the ES don’t prioritize different types of accounts, so orders are placed in a first come first serve basis.
Less Tax Heavy: Trading E-mini futures you only need to report your net profit for that year, instead of each trade.
Low Margin Requirements: Even traders with smaller accounts around $5000.00 can participate in trading the NQ.
Flexibility: Possibly the strongest reason for trading the NQ over the ES mini is the Low tick size of $5.00 compared to $12.50. For new and or small account traders this means you have more options to how you trade. Stops can be wider, and you can trade with multiple contracts if you wish.
Less Volatility than the E-mini S&P 500: Unlike the ES, the NQ excludes financial companies from its index, which contributes to less volatility in the market. Despite this the NQ is one of the most popular E-mini markets and so volume is still high and the market can move very fast at times.
What moves the E-Mini Nasdaq-100 market
The companies that make up the Nasdaq consist of the top 100 most active companies (with the exception of financial companies) that cover a range of economic sectors including: Pharmaceuticals, Telecommunications, Medical equipment, Office supplies, Computer Software, Media and more. However, it is mostly dominated by tech giants like Apple and Amazon. Since the NQ doesn’t include financial companies it reacts differently than the DOW or the ES might.
Major economic events like FOMC meetings and Gross Domestic Product reports will still impact the market but usually the NQ holds up to news better than its E-mini counterparts.
The following are reports and events you want to watch out for:
Gross Domestic Product (GDP) report: This helps measures the nation’s income and expenditure. Includes all total costs for goods and services produced but the country.
Earnings reports and News that relates to technology giants: Keep watch and get regular updates on the major companies that make up the NQ, Earnings reports from Apple Inc, Amazon.com Inc, Microsoft Corp, Alphabet Inc, Facebook Inc, Intel Corp, Comcast Corp, and PepsiCo Inc. all of these companies are fast growing and competitive and more importantly they dominate the Nasdaq 100. News about or Reports from these technology giants can have an impact on the market. If you want to have a look for yourself at exactly what makes up the Nasdaq 100, do a quick google search for “Nasdaq 100 weightage”
Non-farm payroll: Non-Farm Payroll: A report issued monthly showing changes in payroll of all jobs in the U.S. excluding farm workers, private household employees and non-profit organizations.
Unemployment Reports: This effects the Fed Policy’s and reflects the strength of the economy.
FOMC: The Federal Open Market committee holds regular meetings throughout the year. The report covers a huge range of data, including Economic Projections and lowering or increasing interest rates. An FOMC meeting will almost always cause a stir across all markets but since the financial sector is not present in the NQ it effects the market less than that of the ES or DOW. Still you’ll want to be aware of your position during an FOMC meeting as volatility will usually be sporadic. When news does have an impact on the NQ, the market can move lightning fast. Many retail traders usually steer clear of entering the market during and sometime after an FOMC meeting.
The E-Mini Nasdaq 100 is one of the most popular E-mini markets among retail traders. It has a lower tick size of $5.00 that makes it perfect for small account traders to have flexibility and choices. Unlike the ES the NQ isn’t influenced heavily by most news and reports by the financial sector. This means that the market still holds good volume but isn’t as volatile as the DOW or ES. Even so, you’ll want to pay attention to news that has an effect on the technology and Biotech sectors as well as news and reports that have to do with the nation’s overall economic health.
Most of the time the NQ is strongest near the opening hours and when there is big news, like an FOMC meeting, the E-mini NQ will move very quickly, so its advised that new traders wait out events until the worst of the volatility has subsided.