Opinion: The price of 7*24H Nasdaq contracts is driven by leverage and liquidation mechanisms, and is not a true price discovery mechanism.

Markos Mom, writing on the X platform, stated that 24/7 Nasdaq contracts are not a true index; their prices are driven almost entirely by positions, leverage, funding rates, and liquidation mechanisms, rather than new information about the underlying companies, options, or geopolitical events. When the real market closes, there is no ETF arbitrage, options market, or cash-to-equity flow. It's simply a price, a liquidation engine, and traders' predictions of the opening. He points out that this is no longer price discovery, but a stress test. This explains why a sudden 4% drop can occur on a calm weekend, followed almost immediately by a recovery to the previous range. This sudden volatility is not mean reversion, but rather due to a public countdown until the reference market reopens, forcing the market to re-anchor. This distinction explains why the product sometimes experiences sudden and dramatic misalignments. Low volatility encourages leverage, leverage accumulates stop-loss orders, stop-loss orders fuel liquidation, and liquidation causes significant temporary volatility. The product's weekend volatility is not limited by logic or fair value, but by balance sheets and margin requirements. For most people, this is a coin toss gamble with a certain convergence of future events and an extremely uncertain path.