another way of trading the NDX, - QQQ
options.nasdaq-amex.com
The purchase of a single share. That's all it takes to invest in the largest and most actively traded companies on The Nasdaq Stock Market - the companies of the Nasdaq-100 Index.
Introducing Nasdaq-100 Shares, an index tracking stock - the first financial product created by the new Nasdaq-Amex Market Group. Now for the first time, the stocks of the Nasdaq-100 Index are trading as one equity, opening the door to innovative and exciting investment opportunities. Nasdaq-100 Shares trade on the American Stock Exchange under the ticker symbol "QQQ."
One investment for 100 stocks
With Nasdaq-100 Shares, you can buy or sell shares in the collective performance of the Nasdaq-100 Index in a single transaction - just as you buy or sell shares of individual stocks. It's a one-investment portfolio that gives you ownership in the 100 stocks of the Nasdaq-100 Index.
And because Nasdaq-100 Shares trade like stock, you can buy them on margin, sell short or hold your shares for the long term. When you purchase Nasdaq-100 Shares, you're investing in the Nasdaq-100 Trust, a unit investment trust that holds shares of the companies in the Nasdaq-100 Index. The Trust is designed to closely track the price and yield performance of the Index - so you can expect your Nasdaq-100 Shares to move up or down in value when the Index moves up or down.
Convenient trading and tracking throughout the day
Nasdaq-100 Shares have been initially priced to approximate 1/20th the value of the Nasdaq-100 Index, and may be bought and sold at intraday prices throughout the trading day - something you can"t do with conventional index mutual funds that are generally purchased or redeemed only at an end-of-day closing price related to net asset value.
The pricing of Nasdaq-100 Shares is continuous, subject to any trading halts, during Amex trading hours. That means you can obtain up-to-the-minute share prices whenever the market is open. Current Nasdaq-100 Share prices are available from brokers or financial advisers or, on a 20-minute delayed basis. Click here for a quote (QQQ).
Diversification
Nasdaq-100 Shares offer you the ability to help meet an important investment objective - diversification - by allowing you to invest in the performance of the 100 stocks in the Nasdaq-100 Index, a portfolio that includes a range of industries including computer hardware and software, telecommunications, retail/wholesale trade and biotechnology.
Because Nasdaq-100 Shares reflect the collective performance of these companies, the impact of price fluctuations caused by a specific company development will be reduced for holders of Nasdaq-100 Shares. Nasdaq-100 Shares will still be subject, however, to risks specific to the performance of a few component securities that currently represent a highly concentrated weighting in the Nasdaq-100 Index.
Long-term performance
If you're investing for the long term, you can hold your Nasdaq-100 Shares throughout the life of the Nasdaq-100 Trust, a unit investment trust which has a 125-year term, subject to certain early termination events. If you're a more active investor, you can take advantage of market rallies or sell-offs by buying or selling Nasdaq-100 Shares at any time during Amex trading hours.
Low costs
The portfolio of Nasdaq-100 Index stocks held by the Nasdaq-100 Trust is not actively managed, which means the Trust does not try to outperform the Nasdaq-100 Index, just track it closely. And because this tracking requires less costly trading and less portfolio turnover than actively managed portfolios, costs on Nasdaq-100 Shares should be lower than on conventional funds that are actively managed. Indeed, expenses for the Nasdaq-100 Trust are expected to be among the lowest for investments of this type.
Tax efficiency
Because the Nasdaq-100 Trust portfolio is designed to closely track the Nasdaq-100 Index, it is less likely than actively managed portfolios to experience the trading of securities, which can create potentially high capital gains distributions. The Nasdaq-100 Trust will generally only sell securities to reflect changes in the composition of the Index and to pay Trust expenses.
In addition, since Nasdaq-100 Shares are sold through exchange trading, they also will generally not require the sale of stocks and generation of capital gains that is required by conventional index funds in effecting cash redemptions. While block-sized units of Nasdaq-100 Shares will be created and redeemed from the Trust, they will be created and redeemed only "in kind" (i.e., in shares of stock of Nasdaq-100 Index companies), thus avoiding the sale of stocks and the potential generation of a taxable gain. |
