Why Nasdaq 100

The Nasdaq 100 index is one of the most analyzed indexes on the US stock market. It comprises one hundred biggest non financial companies from the technology market sector. The Nasdaq 100 index is also known as a hi-tech index. We may say with high degree of confidence that the Nasdaq 100 index is the most popular (number one index) on the Nasdaq electronic stock market exchange.

So, what does attract institutional investors and regular traders in this index? To answer on this question we have to go more than ten years back in the past to March of 1999 when QQQ stock was introduced. At that time Exchange Traded Funds (ETFs) were only starting to hover the stock market and new QQQ stock that tracks the Nasdaq 100 index get attention of wide range of investors right away. Respectfully, the index has become the main source of analysis as well. The additional fuel to the power was added during the internet bubble of 1999 and 2000 when hi-tech companies were the main trading vehicle. At that time the Nasdaq 100 index and its QQQ stock were the most traded index and the most traded stock. Then the internet bubble crash has pushed this hi-tech index and its tracking stocks into the range of the most volatile commodities. Again, volatility is another attraction for speculators who is coming into the market with the purpose of making fast money in a short period of time. At that time the QQQ stock was the most traded stock in the world. Only a couple of years ago the number one place was shifted to the SPY stock (S&P 500 tracking exchange traded fund).

Right now there are several exchange traded funds, index options and index futures that allow trading the Nasdaq 100 index. The advantage of trading indexes is that there is no need for any complicated fundamental analysis which is already has been done by the company that manages the index (Nasdaq OMX in our case). Therefore, a trader may focus solely on technical analysis of the Nasdaq 100 index and apply the results of the analysis to trade securities that reflects the index trend. The QQQ stock remains to be one of the most popular from this family. However, big attention of the investors is also given to QLD and QID leveraged exchange traded funds (double and double inverse ETFs). NQ index emini futures are also has become quite popular lately.