NQ Futures vs Dow Jones Futures: Comparison Guide
Both NQ futures (Nasdaq-100) and Dow Jones futures (YM) are popular equity index derivatives. While they share similarities as U.S. index futures, they behave differently due to sector weight, volatility, and composition.
This guide compares NQ and Dow Jones futures so you can choose the one best suited to your trading approach.
1. Underlying Index Composition
NQ Futures:
Tracks the Nasdaq-100 index, which includes 100 of the largest non-financial U.S. tech-heavy companies such as Apple, Microsoft, Amazon, and Google.
Dow Jones Futures:
Tracks the Dow Jones Industrial Average (DJIA), consisting of 30 large-cap U.S. companies across various sectors like financials, industrials, and healthcare.
2. Volatility
NQ futures are generally more volatile due to the concentration of growth and tech stocks. This makes them attractive to short-term traders.
Dow Jones futures are more stable, with less aggressive swings, making them better suited for conservative strategies.
3. Contract Details
| Feature | NQ Futures | Dow Jones Futures (YM) |
|---|---|---|
| Ticker Symbol | NQ | YM |
| Exchange | CME | CME |
| Multiplier | $20 × Nasdaq-100 Index | $5 × DJIA |
| Tick Size | 0.25 index points | 1 point |
| Tick Value | $5 | $5 |
Despite different index values, both have the same tick value, but NQ reacts more sharply to market news.
4. Trading Behavior and Patterns
- NQ Futures: React strongly to earnings, Fed speeches, and tech news. Best suited for breakout and momentum trading.
- Dow Futures: Slower and more predictable. Useful for swing or mean-reversion strategies.
5. Best Use Cases
| Trader Type | Preferred Instrument |
|---|---|
| Scalper / Intraday Trader | NQ Futures |
| Swing Trader | Dow Futures |
| Volatility Seeker | NQ Futures |
| Long-term Trend Follower | Either, depending on strategy |
6. Correlation
While both futures usually move in the same direction due to overall market sentiment, NQ often outperforms in bullish tech-led rallies and underperforms during interest rate hikes.
Dow is more defensive, with value stocks providing stability.
Final Thoughts
Choose NQ Futures if you:
- Prefer fast moves and short-term trades
- Want exposure to the U.S. tech sector
- Are an active or experienced trader
Choose Dow Jones Futures if you:
- Prefer balanced sector exposure
- Want lower volatility
- Favor longer holding periods
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FAQs
1. Which is more volatile: NQ or Dow futures?
NQ futures are more volatile due to their tech-heavy composition.
2. Can I trade both NQ and Dow futures together?
Yes, many traders hedge or diversify by using both.
3. Do both futures trade during the same hours?
Yes, both are listed on CME Globex and follow similar trading hours.
4. Which is better for scalping?
NQ futures offer more rapid price movement, ideal for scalpers.
5. Are NQ and Dow correlated?
Yes, but the strength and speed of the moves can vary significantly.
