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Strategies & Market Trends : The Options Box
QQQ 620.76+0.7%Jan 22 4:00 PM EST
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To: Jill who wrote (266)5/14/2000 12:05:00 PM
From: Cosmo Daisey  Read Replies (1) of 10876
 
Jill,
If I had to choose one symbol to trade long/short/options/long term buy & hold it would be QQQ. I follow it every day that I trade and have a feel for the movement of QQQ. I can trade 5000 share blocks without hesitation. Because the price is fixed on the value of the underlying naz 100 stocks a large order doesn't move the price. Large orders of 100,000 shares and more are common with many funds buying and selling QQQ instead of trying to pick individual stocks. The Q's are so closely connected to the comp that it's almost like buying the whole market in one symbol. The Q's are also used to hedge other positions.
I wrote a little program to find the delta of the comp and Q's in real time but I have since abandoned the program. After studying the data I find I can do as well just watching the difference in the daily percent change of the Q's vs the comp. You can also trade the entire naz but the tracking symbol doesn't have enough volatility for me. One way to successfully trade QQQ is to look for daily patterns in the comp and trade QQQ accordingly. Every day that I have checked, the Q's open higher than the low for the day so we know not to buy at the open but perhaps sell short and then enter a buy to cover limit order one point lower. That strategy would be effective just about 100% of the time. The Q's move about one point for every 40 comp points so a day with the naz comp being down 50 and up 50 is a 2 1/2 point move in the Q's.
cdaisey@beach-day.com
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