Trading Minifutures on Nordnet?

General
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I just started getting my first feel for Nordnet’s mini futures and turbos. The intention is to learn more about short-term trading using them.

My first impression of the order book and data has been a bit surprising. At least initially, it seems like a rather quiet market, and in practice, the JPAG market maker appears to be running a large part of the trading.

I would be interested in hearing about the experiences of those who have traded these for a longer time:

  • How well does liquidity actually work?

  • Is the spread usually okay even in volatile situations?

  • What leverage levels do you personally use?

  • And are there any beginner mistakes that should be particularly avoided?

All practical experiences are of interest.

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I personally could comment on those turbo leverage levels and beginner mistakes, as they are actually closely related to each other. One could probably write a book or two about these, but let’s try to keep this explanation as a concise package.

First of all, it’s good to understand that in turbos, leverage behaves quite treacherously. If you are, for example, long with 5x leverage, the leverage ratio starts to rise surprisingly fast as the underlying asset’s price falls. This quickly backfires as the position melts away with an increasing leverage ratio right before your eyes, and the risk of losing capital begins to materialize.

For the reason mentioned above, you must set a clear stop loss level for yourself where you will let go of the holding. You then have to balance this with the leverage ratio so that the underlying asset has enough room to move in the right direction without the risk becoming too great. In considering these, various technical analysis tools have been an essential help for me, at least.

The third point is knowing the underlying asset. Especially with leveraged products, the differences between various stocks and asset classes become apparent quickly. It is a completely different thing to buy, for example, Kesko with leverage than it is to buy oil. Before buying, you must therefore understand what magnitude of price volatility can be expected from the underlying asset under “normal conditions.” Otherwise, you are flying somewhat blind regarding the risk assumed.

So, the tips summarized:

  • Preferably start too cautiously
  • Define a clear stop loss level for yourself that you also adhere to
  • Understand what is to be expected from the movements of the underlying asset

As a general closing remark, it should be mentioned that, especially in the early stages, the destruction of capital is, if not certain, at least very likely, so do indeed start carefully.

Good luck!

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