TechFlow news, December 15 — Market analysts pointed out that the 24/7 Nasdaq index is not a genuine index outside of regular trading hours, but rather a synthetic perpetual contract. The product's price is primarily driven by positions, leverage, and liquidation mechanisms, rather than company fundamentals or actual market events.
During periods when regular markets are closed, such as weekends, the absence of ETF arbitrage, options trading, and cash liquidity means that price movements resemble a "stress test" for traders rather than a true price discovery process. Low volatility environments often encourage excessive use of leverage, which could trigger cascading stop-losses and forced liquidations, leading to sudden and severe price swings.
Analysts emphasized that the product mainly exists to satisfy the demand of "wanting to trade even when there is nothing to trade." Investors should fully understand its risk characteristics and avoid treating it simply as a substitute for the Nasdaq index.
