QQQ Invesco QQQ Trust
QQQ tracks the NASDAQ-100 Index of the 100 largest non-financial companies listed on NASDAQ, heavily weighted toward technology stocks. It is the second most popular ETF for options trading.
Key Facts
- • Launched in 1999 by Invesco, focuses on technology and growth companies
- • Tracks the NASDAQ-100 Index, including Apple, Microsoft, Amazon, NVIDIA, and Alphabet
- • Expense ratio of 0.20%, higher than SPY due to its growth-focused exposure
- • Average daily trading volume over 40 million shares
- • Options on QQQ are highly liquid, often used by traders for tech sector exposure and hedging
Related Trading Concepts
Call Option
A contract that gives you the right (but not the obligation) to buy 100 shares of an underlying asset at a fixed price (the strike price) by a specific date (the expiration date). You buy a call when you expect the underlying price to rise above the strike price plus the premium you paid.
Put Option
A contract that gives you the right (but not the obligation) to sell 100 shares of an underlying asset at a fixed price (the strike price) by a specific date (the expiration date). You buy a put when you expect the underlying price to drop below the strike price minus the premium you paid.
Strike Price
The fixed price at which the holder of an option can buy (for call options) or sell (for put options) the underlying asset. Options are available at multiple strike prices, typically spaced $1 to $5 apart for liquid underlyings.
Option Premium
The price you pay per share to buy an option contract. The total cost of the option is the premium per share multiplied by 100 (the standard contract size) and the number of contracts you buy. The premium is made up of intrinsic value (if the option is in the money) and time value (the extra amount traders pay for the chance the option will move further into the money before expiration).
Break-even
The underlying price at which an option trade results in zero profit at expiration. For call options, break-even is strike price + premium per share. For put options, break-even is strike price - premium per share. The underlying must move past the break-even point at expiration for the trade to be profitable.
Volatility
How much and how fast an asset price swings. High volatility means large price moves in short periods; low volatility means calm, small moves.
Learn More With Our Guides
Analyze With These Tools
Options Profit Calculator →
Model long call and long put positions on QQQ options at expiration.
Why use this: QQQ is the second most popular options underlying, widely used for tech sector exposure and hedging.
Position Size Calculator →
Calculate optimal position size for QQQ options trades based on your risk tolerance.
Why use this: After modeling your QQQ options trade, size your position to limit risk to 1-2% of your account.
Risk/Reward Calculator →
Evaluate the risk/reward ratio of QQQ options trades.
Verify your QQQ options trade offers favorable returns relative to the risk before entry.