NAS100 and US TECH 100 are not unfamiliar to many investors in the financial market, they are often seen as representations of the Nasdaq 100 index. However, while they are similar, they aren’t entirely the same.
In financial trading, NAS100 refers to the trading symbols for the NASDAQ 100 index, which is the Contract for Differences (CFDs) derived from Nasdaq 100 futures. Some brokers also use US100 or USTECH100 as their symbol for this index.
This article will explore into relationship between NAS100 (US100) and the NASDAQ, explaining the pros and cons of trading NAS100, and how to trade it. The key points of the article include:
- The Nasdaq index futures’ primary contract, which forms the basis for US100 CFDs.
- NAS100 provides more flexible trading conditions, such as leverage and contract specifications, compared to Nasdaq futures.
- By trading NAS100, one can speculate on the price movements of Nasdaq futures with less than $5 in margin.
1. NAS100 (US100) vs NASDAQ Index – What’s the Differences?
NAS100, or precisely the NASDAQ100 Index spot, commonly referred to as US100 cash, which is the CFD (Contract for Difference) derived from the NASDAQ futures main contract. Despite of their similar trend trajectory, the NAS100/US TECH 100 is not equivalent to the NASDAQ Index.
The NASDAQ 100 Index Spot = NASDAQ futures contract quote price + fair value
Simply put, US100 cash is almost identical to the NASDAQ futures contract price, and most of the time, the futures main contract quote price is closely tracking the NASDAQ Index. Therefore, by trading US100 CFDs, investors can directly trade the price movements of the Nasdaq 100 Index without required to hold any underlying futures contracts.
2. Advantages of Trading NAS100 (US100)
Why do investors choose to trade US100 CFDs instead of directly trading Nasdaq futures? The reason lies in the trading requirements and flexibility of CFDs, with several advantages for US TECH 100:
1) High Leverage and Low Thresholds
Leverage is a key attraction in futures trading, with Nasdaq futures offering leverage of nearly 20 times. However, compared to the leverage of NAS100, which reaches several hundred times, Nasdaq futures instantly pale in comparison.
Higher leverage also means lower trading thresholds, requiring less than $5 in margin to trade NAS100.
2) Smaller Contract Size
In Nasdaq futures trading, although there are smaller contracts like the mini and micro Nasdaq contracts, they still require trading in whole lot. However, NAS100 offers a minimal trading of just 0.1 Lot, further lowering the trading threshold.
3) Less Complicated Margin Calculation
Nasdaq futures margins are divided into two type – Initial margin and maintenance margins, and these margins differ between intraday and overnight trading. For instance, the intraday margin for micro-Nasdaq futures is currently $462, while overnight trading requires $1,848.
Calculating margins for NAS100 is much simpler. For example, with a quote at 15,000 index point and 500 times leverage, the margin for trading one lot is: 15,000 / 500 = $30, regardless of intraday or overnight trading.
4) No Expiry Settlement Date
Futures contracts have expiry settlement dates, with Nasdaq futures being quarterly contracts. Investors wishing to continue trading must close their positions on settlement dates and establish new positions on new contracts.
NAS100, on the other hand, has no expiry settlement date. Its price is anchored to the main Nasdaq futures contract price, allowing traders to maintain their positions indefinitely.
3. Factors to Consider – Trading NAS100
Although it allows the individual investors to trade the Nasdaq index at a lower threshold, NAS100 also has its drawbacks compared to futures trading:
1) Overnight Holding Swap
Holding positions overnight refers to holding them past 5 p.m. Eastern Time (5 a.m. Taipei/Hong Kong time). In spot CFD trading, holding positions overnight incurs overnight swap charges.
NAS100, quoted in US dollars, experiences overnight swap as follows:
- Going long is akin to borrowing US dollars to buy NAS100, thus incurring interest in US dollars.
- Going short position on NAS100 is the opposite, where one can gain interest in US dollars.
In actual overnight swap calculations, brokers usually add a premium. Therefore, the overnight interest to be paid might be higher than the overnight interest gained in the opposite direction.
Additionally, there are some cases where overnight swap needs to be paid regardless of going long or short.
2) Brokerage Credit Risk
As CFDs are traded over-the-counter, the risk associated with CFD brokers is relatively higher compared to exchange-traded instruments like futures or stocks, which are traded through established exchanges. Therefore, the choice of a broker when trading NAS100 is crucial, as it directly impacts the safety of funds.
There are numerous broker platforms in the market, and selecting a broker that operates robustly and holds mainstream national regulatory licenses is generally much safer than choosing brokers regulated in smaller countries.
4. NAS100 (US100) Contract Specification
Before started trading NAS100, it is important to understand the contract specification for the NAS100. Here are some of the key points to understand:
1). Contract Value
Value of one NAS100 Contract (1 Lot) = NAS100 Quote X 1 USD
For example, if the current quote of NAS100 is 15,000 points, the contract value for 1 lot would be $15,000
2. Leverage and Margin
Different CFD brokers may offer different leverage, ranging from tens to hundreds. Below is the formula for calculating the margin when trading one lot of US TECH 100:
Margin for one NAS100 lot = NAS100 quote × 1 US dollar / Leverage
Assuming a leverage of 500:1, and trading one lot of NAS100 at a quote of 15,000, the required margin would be $30. Many CFD brokers also support mini lots, allowing trading of 0.1 lots with a margin requirement as low as $3.
3) Pip & Spread
Most brokers provide NAS100 quotes down to two decimal places, with the first decimal place representing one pip. The difference between the buying and selling quotes is called the spread, which is the cost of the trade.
For example, in the quotes below, the spread is 1.1 pips, indicating that the cost of trading one NAS100 lot at this moment is $1.1.
5. NASD100 (US100) Trading Hour
The reason why NAS100 it is favoured by individual investors is due to its trading hours. The trading hours of NAS100 are completely aligned with NASDAQ Futures, providing 23 hours of trading each day and 5 days a week.
| NAS100 Trading Hours (Singapore/Hong Kong Time) | ||
|---|---|---|
| US Daylight Saving Time | US Standard Time | |
| Opening Time | Monday 06:00 | Monday 07:00 |
| Closing Time | Saturday 05:00 | Saturday 06:00 |
| Daily Break | 05:00 – 06:00 | 06:00 – 07:00 |
6. Trading NAS100 – Example
Once we understand the basic concepts and contract specification of NAS100, the following are the example of trading the US TECH 100, and how we may calculate the profits and losses.
1) Buying (Going Long):
| Initial Capital | 100 USD |
|---|---|
| Lot Size (Going Long) | 2 Lot |
| Opening Price | 14,5000 |
| Leverage | 500x |
| Margin Calculation | (14,500 x 2) / 500 = 56 USD |
| Closing Price | 15,000 |
The profit/loss of this US100 long trade = (15,000 – 14,500) x 2 = 1000 USD, a total of 1,000 USD profit.
2) Selling (Going Short):
| Initial Capital | 100 USD |
|---|---|
| Lot Size (Going Short) | 2 Lot |
| Opening Price | 14,5000 |
| Leverage | 500x |
| Margin Calculation | (14,500 x 2) / 500 = 56 USD |
| Closing Price | 14,300 |
The profit/loss of this US100 short trade = (14,500 – 14,300) x 2 = 200 USD, a total of 200 USD profit.
7. Best Broker for Trading NAS100 (US100)
After mastering the trading knowledge of NAS100, the next step is to choose a brokerage firm for trading. As we mentioned above, Broker security is important factor to consider when coming across trading NAS100 CFD.
Below are five brokers with high overall score for traders to consider:
1) ThinkMarkets
| Regulatory Authorities | UK FCA, Australia ASIC, Japan Financial Services Agency, New Zealand FMA, Cyprus CySEC, South Africa FSCA |
|---|---|
| Trading Platform | MT4, MT5, ThinkTrader |
| Trading Symbol | NAS100 |
| Contract Size | 1 USD x Index Quote |
| Maximum Leverage | 500:1 |
| Margin per Lot | 15,000 / 500 = 30 USD (Calculated based on 15,000 point) |
| Minimal Lot | 0.1 Lot |
| Spread | 0.8 Point |
As a well-known low-cost CFD broker, ThinkMarkets offers a maximum leverage of 500:1 on NAS100 products, with a cost of only 0.8 USD for trading 1 lot during active trading hours.
In addition to providing popular MT4/5 platforms, ThinkMarkets has integrated TradingView charts into its proprietary platform, ThinkTrader, making it user-friendly for traders who use TradingView.
2) INFINOX
| Regulatory Authorities | UK FCA, South Africa FSCA, Panama SCB, Belize FSC |
|---|---|
| Trading Platform | MT4, MT5, IX ONE |
| Trading Symbol | NAS100 |
| Contract Size | 1 USD x Index Quote |
| Maximum Leverage | 1,000:1 |
| Margin per Lot | 15,000 / 1000 = 15 USD (Calculated based on 15,000 point) |
| Minimal Lot | 0.01 |
| Spread | 1.2 Point |
INFINOX is a well-known CFD broker, and while its trading costs may not be the lowest, it offers the highest leverage of 1,000:1 on NAS100. Additionally, INFINOX’s NAS100 product allows trading with a minimum of 0.01 lots, making it one of the brokers with the lowest entry barriers.
3. IG
| Regulatory Authorities | USA NFA, UK FCA, Australia ASIC, Japan Financial Services Agency, Switzerland FINMA, Singapore MAS |
|---|---|
| Trading Platform | MT4, L2 Dealer, ProRealTime |
| Trading Symbol | US TECH 100 |
| Contract Size | 1 USD x Index Quote |
| Maximum Leverage | 200:1 |
| Margin per Lot | 15,000 / 200 = 75 USD (Calculated based on 15,000 point) |
| Minimal Lot | 0.5 Lot |
| Spread | 1-2 Point |
As the world’s largest CFD broker, IG also regulated by several authoritative regulatory, making it one of the safest CFD Broker, and the name for NAS100 is directly displayed as the US Tech 100 Index.
4. Exness
| Regulatory Authorities | UK FCA, Cyprus CySEC, South Africa FSCA |
|---|---|
| Trading Platform | MT4, MT5 |
| Trading Symbol | USTEC |
| Contract Size | 1 USD x Index Quote |
| Maximum Leverage | 400:1 |
| Margin per Lot | 15,000 / 400 = 37.5 USD (Calculated based on 15,000 point) |
| Minimal Lot | 0.01 Lot |
| Spread | 3.2 Point |
Exness is one of the most popular high-leverage brokers, offering a maximum leverage of 400:1 on its NAS100 (USTEC) product. It supports micro lot trading with a minimum of 0.01 lots.
5) XM
| Regulatory Authorities | Cyprus CySEC, Belize FSC |
|---|---|
| Trading Platform | MT4, MT5 |
| Trading Symbol | US100Cash |
| Contract Size | 1 USD x Index Quote |
| Maximum Leverage | 500:1 |
| Margin per Lot | 15,000 / 500 = 30 USD (Calculated based on 15,000 point) |
| Minimal Lot | 0.1 Lot |
| Spread | 1.2 Point |
XM is one of the most popular online brokers, offering a maximum leverage of 500:1 on its NAS100 product.
6) Oanda
| Regulatory Authorities | USA NFA, UK FCA, Australia ASIC, Japan Financial Services Agency, Singapore MAS |
|---|---|
| Trading Platform | MT4, MT5, FXTRADE |
| Trading Symbol | US100 |
| Contract Size | 1 USD x Index Quote |
| Maximum Leverage | 888:1 |
| Margin per Lot | 15,000 / 888 = 16.9 USD (Calculated based on 15,000 point) |
| Minimal Lot | 0.1 Lot |
| Spread | 2.7 Point |
Oanda is one of the oldest online brokers in history, offering leverage of up to 888:1 for NAS100.
