A futures contract is a legally binding agreement to buy or sell a specific asset at a predetermined price on a specific future date. In practice, most futures traders never intend to take delivery of anything — they’re speculating on price direction and closing their position before expiry.
A Simple Example
Imagine NQ is trading at 19,000. You believe it’s going to rise. You buy one NQ futures contract. If the price rises to 19,100 — a 100-point move — you’ve made a profit based on the contract’s point value. If it falls to 18,900, you’ve made a loss. You don’t own any Nasdaq stocks — you simply took a position on the direction of price.
Long and Short
- Going Long — you buy a contract, betting the price will rise. You profit if it goes up.
- Going Short — you sell a contract, betting the price will fall. You profit if it goes down.
This ability to profit in both rising and falling markets is one of the key advantages of futures trading.
Contract Expiry
Futures contracts have an expiry date — typically quarterly (March, June, September, December). On TradingView you’ll see this as NQ1! or ES1! — the “1!” means it automatically displays the front-month contract.
As an intraday trader, you don’t need to worry about expiry. If you open and close positions within the same session, expiry is completely irrelevant to your day-to-day trading.
Point Values
For standard NQ, each point is worth $20. For Micro NQ (MNQ), it’s $2 per point. This is why understanding position size and risk management is essential before you start.
← Back to Learn Trading