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# Comparing NQ/qqq

Discussion in 'Trading' started by sharktooth, Oct 27, 2002.

1. ### sharktooth

Could you give me some feedback?

As you know 1 nq equals 8 lots of qqq.

A basic calculation showed me that at IB (=a US broker) the cost for transaction, b/a spread and slippage of 8 lots of qqq (\$29)
is slightly favorable to that of a single nq (\$34.80) contract:

QQQ round trip cost for 8 lots qqq= max \$32 and min \$29.
==========================================
Transactioncost for 1 round trip of 8 lots is max. \$ 16 and min. \$13 (if not scaling in/out).

The average B/A spread of 8 lots of qqq (\$1 a lot) is \$ 8.
Average slippage 8 lots qqq (\$ 1 a lot) is \$ 8.

NQ round trip cost 1 nq=\$ 34.80:=
=========================
Transaction costs for 1 round trip of 1 nq is \$4.80.
Average slippage is (0.5 point) is \$ 10.

I would like to discuss:

a] are there (backtested?) tactics for scaling in/out and/or
traling the 8 lots qqq that are superior, in risk/reward, to
trading just a single nq contract?

b] how is your experience of qqq execution (ibsmart, arca) speed
and reliability during normal market hours compared to
globex for nq?

tax US/non US: because I live outside the US, the favorable
US tax treatment of futures is irrelevant to me.

Regards

2. ### Uncle Festus

Except for outside the market hours the spread is generally 1/2 point.

3. ### sharktooth

Thanks, with a spread of 1/2 point the cost is now about
the same for nq and 800 qqq.

This makes the following question valid:

Any ideas on how the risk/reward potential of scaling/trailing 800 qqq can methodicaly outweight the trading of a single nq contract?

4. ### Aaron

With the NQ's you get 60% long term, 40% short term capital gains and with the QQQ's you get 100% short term. With NQ's you get to keep roughly 5% more of your profits after taxes. This probably outweighs any transaction cost differences between these two very liquid markets.

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