NQ futures explained: tick size, point value, multiplier

Most people meet NQ the same way. They open a chart, see the Nasdaq move 40 points in ten minutes, and buy one contract without knowing what a point is worth. Then a “small” pullback costs them several hundred dollars and they wonder what happened.

So before any setup, the arithmetic. It is short, it never changes, and it decides how big your next mistake can be.

What NQ is

NQ is the E-mini Nasdaq-100 future, listed on CME Group. It tracks the Nasdaq-100 index: the 100 largest non-financial companies listed on the Nasdaq exchange. In practice that means a heavy weight in a handful of very large technology names, which is a big part of why NQ moves the way it does.

The contract is cash-settled. Nobody delivers a basket of shares at expiration; open positions are simply marked to a final settlement value and the difference is paid in cash.

There is also a smaller sibling, MNQ, the Micro E-mini Nasdaq-100. Same index, same price, same hours. One tenth of the size.

Tick size and point value

The whole table you need to memorize fits in four rows.

The multiplier on NQ is $20 per index point. The price moves in quarter points, so each tick is a quarter of 20: $5. MNQ uses a multiplier of 2, so its tick is worth 50 cents.

Now make it concrete. Suppose you place a stop 20 ticks away from your entry. On NQ, 20 ticks are 5 points, and 5 points are $100 per contract. On MNQ the same stop is $10. The idea behind the trade is identical; being wrong on NQ simply costs ten times more.

Another example. NQ routinely travels a few hundred points in a full session. Assume a day where the range is 250 points. One NQ contract held from the low to the high would have moved $5,000. Nobody catches the whole range, but the number shows how far a single contract can swing in one session.

When NQ trades

NQ trades electronically on CME Globex almost around the clock, from Sunday evening to Friday afternoon, New York time, with a short pause every afternoon for maintenance. The exact schedule, including how it changes around holidays, is on the exchange’s own page. Look at it once and bookmark it.

More important than the schedule: not all hours are equal. The busiest window by far is the US cash session, when the stocks in the index are trading. Traders call it RTH (regular trading hours). Everything else, the Asian and European hours, is ETH or “overnight”.

The difference is not cosmetic. Volume, speed and spread behave differently. Overnight NQ can drift quietly for hours on thin volume, and then the first minutes after the cash open can print more contracts than the entire night. Many levels that day traders watch (the overnight high and low, the RTH open) come from this split.

A note for traders outside the US: the gap between your clock and New York changes during the year because of US daylight saving time, so the cash open does not land at the same local hour all year. Check it instead of assuming.

Contract months, expiration and the roll

NQ is a quarterly contract. There are four expirations per year, in March, June, September and December, with the month codes H, M, U and Z. A contract name reads like NQZ plus the year digit: the December contract.

Each contract stops trading on the third Friday of its month, at the open of the cash session, and settles against a special opening quotation of the index. You almost never want to be in it by then.

What matters for a day trader is the roll. In the days before expiration, volume migrates from the expiring contract to the next one. At some point the next contract becomes the one where everybody is, and your charts and orders should follow. Most platforms handle this with a continuous symbol. In EliteXCharts, for example, the continuous NQ chart points to the current contract and moves to the next expiration around the roll date, and an order on the continuous symbol goes to the current contract.

Two consequences worth knowing. First, the two contracts trade at slightly different prices (the gap reflects interest rates and dividends until expiration), so a level drawn on the old contract may not line up exactly on the new one. Second, during the roll week, volume on the old contract fades fast. Trading it out of habit means wider spreads for no reason.

NQ or MNQ?

If you are still learning, or your account is small relative to NQ’s swings, trade MNQ. Not because it is “for beginners”, but because position size has to fit your stop, and an NQ stop that makes technical sense is often too expensive for the account. A setup that needs 40 ticks of room is $200 per NQ contract. On MNQ it is $20, and you can size up in steps of one micro instead of jumping in steps of ten.

The trade-off is that the micro is a smaller, thinner market. The order flow you want to read (the tape, the footprint, the depth of book) lives in NQ, where the size is. Reading MNQ’s tape tells you much less.

The clean solution is to read one and execute the other. EliteXCharts has a Cross Trade feature built for exactly that: you analyze on the NQ chart and the order goes to MNQ, same quantity, same price, same expiration. One chart, the right instrument for your account.

What the tick value does not tell you

The point value is fixed. The risk is not. Twenty dollars a point means very different things on a quiet holiday session and in the minutes after a major economic release. What actually sets your risk is how far NQ tends to move against you before your idea plays out, and that changes with volatility.

There is also a structural piece that has nothing to do with the contract specs. On some days, a good part of NQ’s intraday behaviour comes from options hedging on the Nasdaq-100, through QQQ and NDX options. The post on the gamma flip and NQ explains why the same contract can range all day on one side of a level and trend hard on the other.

And if you want to see the flow behind those moves, start with what order flow trading is: who is hitting the bid and lifting the offer behind each candle.

Quick reference

NQ: E-mini Nasdaq-100, CME, cash-settled. Tick 0.25 points, $5. Point $20. MNQ is one tenth: tick $0.50, point $2. Trades nearly around the clock from Sunday evening to Friday afternoon, New York time, with a short daily pause; the busiest window is the US cash session. Quarterly: March, June, September, December. Exchanges can and do adjust contract terms, so treat this as a starting point and the exchange’s specification as the final word.

Futures trading involves substantial risk of loss and is not suitable for every investor.