NDX vs. MNX vs. QQQ vs. QQQQ

Discussion in 'Trading' started by flytiger, May 27, 2005.

  1. Can I tap collective knowledge here for some real world experience trading these vehicles? Most bang for the buck? Liquidity? Success stories? Nightmares? It appears that if you have the buying power, shorting the Q's makes sense. But how about the leverage in options? Thanks. I look forward to reading your responses. I'm looking for a hedge on one hand, and a profit vehicle on the other. Maybe that's two different items.
  2. MTE


    Just a note, QQQ=QQQQ (it's just a new symbol).

    So are you asking about options on the respective underlyings?
  3. Right. Assorted Options vs the QQQQ including but not limited to QQQ options.
  4. MTE


    Options on Q's are like equity options, i.e. American-style, last trading day is the third Friday, and physical settlement.

    NDX and MNX options are index options, i.e. European-style, last trading day is Thursday, and cash-settled.

    Q's options are very liquid, not to say that NDX/MNX options are not, but Q's options are more liquid.

    However, because NDX/MNX are higher priced ones, especially NDX, premiums on OTM options are proportionately higher. So deep OTM options on Q's may be worthless for all intents and purposes, but corresponding options on NDX/MNX may offer good premium.
  5. It sounds, then, that the Q's would work for me. If I bought in the money close up, little premium, and I should correlate closely w/ the market move. To spread, the others would allow me to sell some premium. Two distinct features/benefits/applications.