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Strategies & Market Trends : The Options Box -- Ignore unavailable to you. Want to Upgrade?

To: Dr. Zax who wrote (10076)	3/14/2001 11:44:29 PM
From: Lee Lichterman III	Read Replies (1) \| Respond to of 10876

Wow you ask teh hard ones. First of all, the easy way to do this would be to buy a share of QQQ and then you would automatically get the 100 page prospectus on the QQQ. I have a whole stack of them and they did just write a new one dated January 2001. Q - Are the QQQ a basket? A - No, it is a trust. It is designed to track the NDX or NASDAQ 100 but There is no assurance that the price and yield performance of the NASDAQ-100 can be fully matched That is right in the very first paragraph. Q - could it pay a dividend? How would that dividend be distributed? A - If dividends exceed Trust expenses, an income net of expense amount, a pro rata amount ( less accumulated Trust expenses) of regular cash dividends for stocks in the trust that have gone ex-dividend - will be paid quarterly on the last business day of April, July, October, and January. I have yet to see one and I don't expect one. Tech stocks don't have real earnings and sure don't pay dividends, it is all smoke and mirrors but that is another story <g> Q - who gets to create QQQs? A - "Creation units of 50,000 NASDAQ-100 Index tracking stock are created by depositing into the NASDAQ-100 Trust a specified portfolio of stock closely approximating the composition of the NASDAQ-100 and in certain cases, a specified cash amount. Creation units can be redeemed for a specified portfolio of stocks and cash. The trustee determines shares of component stocks in the creation unit before trading opens each busines day. The required cash amount is determined after the close of each business day. Q - the owner can ask for the actual stocks underlying the holder A - See above Q - Do they have any value other than that the price is derived from the Naz 100? A - The actual answer from the prospectus once again...The net asset value (NAV) for the QQQ is computed each business day as of the closing time of the NASDAQ Stock Market. ( Ordinarily 4:00 PM New York time). NAV represents the aggregate closing market value of the underlying portfolio of NASDAQ-100 securities in the Trust, plus portfolio cash and any accrued dividends minus accumulated Trust expenses on a per NASDAQ-100 Index Tracking Stock basis Again, I would either buy a share or call your broker or go to the NASDAQ site and request a prospectus. All your questions were in the first two pages. Especially if you are in an investment club, it would be a good exercise to read a prospectus. Most investors never read them.......or a 10Q, or a 10K, much less all the other stuff. In case you are curious as to what makes up the index each day.... dynamic.nasdaq-amex.com Good Luck, Lee