Opinion: 24/7 NASDAQ Futures Prices Driven by Leverage and Liquidation Mechanisms, Not True Price Discovery

In a recent post on X platform, Markos Mom stated that the 24/7 NASDAQ futures are not a true index, as their prices are largely driven by positions, leverage, funding rates, and liquidation mechanisms, rather than new information from underlying companies, options, or geopolitical events. When the real market is closed, there are no ETF arbitrage, options market, or cash stock flows. It is simply a price, a clearing engine, and traders predicting the opening. This is no longer price discovery, but a stress test. This explains why sudden 4% drops can occur on calm weekends, followed by an almost immediate rebound to the previous range. These sudden fluctuations are not mean reversion, but due to a public countdown until the reference market reopens, forcing the market to re-anchor. This difference explains why the product can sometimes experience sharp dislocations. Low volatility encourages leverage, leverage leads to stop-loss clustering, stop-loss triggers liquidation, and liquidation causes massive temporary fluctuations. The weekend volatility of this product is not limited by logic or fair value, but by balance sheet and margin constraints. For most, it is a coin-flip gamble with future deterministic convergence events and an extremely uncertain path.

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