Options Trading | Uncovered Options | Naked Options | Trading System

The QQQ is the most active of all the exchange traded funds and is linked to the top stocks in the Nasdaq Composite Index, known as the Nasdaq code NDX. It came into being in March and behaves just like a normal company stock, pays dividends and has options.

The advantage however, of using an index related fund is that, unlike individual company stocks whose price action can be dramatically affected by earnings reports or news items such as a change in management, product releases, disasters etc, an index generally absorbs the impact of these things because the price movement for one individual share is never significant enough to affect the whole index.

Only major economic news is likely to make a significant overnight difference to an index.

Trading the QQQ is a cheaper alternative to trading the NDX directly. This being the case QQQ option trading is not only highly liquid which makes it easy to get trades filled, but also a safer alternative since its price movements are smoother and less likely to experience overnight gapping.

This makes the QQQ an ideal option trading vehicle. You can even take positions in it to hedge or balance your existing portfolio of options positions, particularly as expiration dates for short positions draw near.

The QQQ is known to be a highly volatile ETF because the Nasdaq includes a heavy weighting of tech stocks such as Microsoft, Apple, Intel, Oracle and Google. The second highest component is the health care industry which can also be highly volatile due to their sensitivity to news items such as FDA product approvals or otherwise. As such, it can provide good setups for option straddle trading, or even better — the Victory Spread.

Or you may simply wish to wait for an overall position profit level. This strategy is one of many taught in the popular Trading Pro System series of videos.

QQQ Options Trading In Gray Area of Tax Law - TheStreet

There are even services out there such as OneQTrades. These include QQQ option trading signals.

Some also advertise covered call services based on the QQQQ. In summary, QQQ option trading can provide some exciting possibilities for the serious trader due to its liquidity and volatility. QQQ Call Credit Spread Risk Graph. Please follow and like us: You Might Also Like: Index Option Trading OEX Option Trading Index Options Vs ETF Options How to Use the VIX Index Leap Option Strategy Trading ETF Options Trading Trading Index Options Index Call Options Ratio Trading David Valllieres and XTR ProTrader Stock Index Options What Is An Index Option.

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