Nasdaq 100 Index

 Nasdaq 100 index is one of the largest non-financial companies listed on the Nasdaq 100 stock exchange. This index is value-weighted. Nasdaq 100 does not contain financial companies. This index is therefore different from the S&P500 and the Dow Jones Industrial Average (DJI, Dow 30 or simply DOW).

Nasdaq 100 began on January 31, 1985. NASDAQ Financial -100 Index was introduced on the same day as Nasdaq 100. This explains why the financial companies were and still are excluded from the Nasdaq 100 index.

The usual abbreviation for Nasdaq 100 is NDX and the NQ is the abbreviation for the e-mini indexes.

To be included in the Nasdaq 100 index a security must meet many criteria such as, it must be of a non-financial company, must not be part of a bankruptcy proceedings, only one class of security per issuer is allowed and many more.

On December 1, 2004 the Nasdaq 100 QQQ symbol was changed to a four letter symbol QQQQ.

There are several advantages to trading Nasdaq 100 stock. These benefits include; one may buy and sell at any time during the trading day, one may acquire a broad market portfolio, one has the ability to buy on margin and there are no management and sponsor fees, just to name a few.

Although there are many advantages, there are of course some disadvantages as well including; the stock prices may decline, an index may be highly concentrated and may be more volatile in comparison to other indexes, the shares may fluctuate and more.

Powershares is now the sponsor of the most traded security in the world; Powershares-QQQ which has the QQQQ symbol. Powershares-QQQ replicates the Nasdaq 100 index. It was previously known as the Nasdaq-100 Index Tracking Stock or the QQQ and now it is known as the Powershares-QQQ. Some of the benefits of this include; diversification, meaning that the Powershares QQQ tracks the performance of the Nasdaq’s largest 100 non-financial companies, low ownership costs, the ETFs provide low costs because of their efficient structure, flexibility in the fact that the shares can be bought and sold at intraday prices throughout the day and near instant liquidity because Powershares may be bought and sold on the exchange at any time during trading hours.

Some of the trading strategies for the Powershares QQQ include: long term investments meaning that this could be a good choice for retirement account or any other types of long term investments, short-selling or in other words you are allowed to sell shortly after the price is already going down which in return allows one to react more effectively to downturns and lastly margin trading which means that Powershares may be purchased on the margin.