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Newbie Question - Create Index Spread


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CanadianGod
Regina, Saskatchewan
 
Posts: 4 since Mar 2020
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I have obviously never traded futures before, and I am a long ways from ever doing it. Just learning at this point.

Say I wanted to create a custom spread to mimic the daily percentage moves between the NASDAQ and the DOW indices. This way when the DOW moves 3%, my YM position moves 3%, and when the NASDAQ moves 3%, my NQ position moves 3%.

Given that I want the spread between these two indices, I will obviously have to buy/sell a few more of one or the other to make a near balance... and the spread would never be perfect.

Can any one tell me how to calculate the minimum # contracts on each leg to create the minimum sized spread to make this work?

I am new with tick size, tick value, contract size, etc.

I tried it with simulated CFDs and it was 3 NASDAQ to one DOW, but futures are a totally different game.

Thank you to those who donate their time. I hope to pay it forward one day.


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