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Earl:
The QQQ ETF futures are physical delivered and can be traded in
either a futures or a securities account. Also, they are smaller and
thus more scalable to a particular portfolio size for hedging
purposes.
If you are trading options, there are margin breaks for various
strategies. As a whole, the ETF futures are the perfect hedge
against cash QQQs or options. With the emini futures you have cash
settlement to worry about.
As far as liquidity is concerned, the emini would be the winner. And
much of the ETF cash activity gets laid off in the futures anyway.
But there are some characteristics of QQQ futures, or security
futures as a whole, which might make it a better choice.
And when the liquidity does arrive in greater quality for the QQQ ETF
futures, those attributes will be even more valuable.
Regards,
John J. Lothian
Disclosure: Futures trading involves significant risk. Security
futures are not for everyone.
--- In realtraders@xxxxxxxxxxxxxxx, "EarlA" <earl.a@xxxx> wrote:
> John, why would one consider trading the SS futures when the emini
contract
> appears to be far more liquid?
>
> Earl
>
> ----- Original Message -----
> From: "John J. Lothian" <I4Lothian@xxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Monday, June 30, 2003 5:44 PM
> Subject: [RT] Re: qqq vs nqlx
>
>
> > Kate:
> >
> > The QQQ futures, traded on the exchange now known as NQLX
(formerly
> > Nasdaq Liffe Markets after last Thursday's decision by Nasdaq to
> > offload its investment to Euronext.liffe), have many advantages.
> >
> > First off is the fact they are futures. Thus, you are putting up
> > only 20% for the security futures margin, not 50 or 100%. Second,
> > you have open trade equity that allows you to maintain a position,
> > while throwing off cash that can be invested in other positions or
> > investments. That assumes you are holding winning positions.
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