NASDAQ-100 Index Options

The NASDAQ-100 Index was launched in January 1985 and comprises the largest non-financial companies listed on the NASDAQ stock market. Most of the 100 issues are well known companies, such as Microsoft, Qualcomm, Intel, and Cisco Systems.

NASDAQ-100 Index Options were first traded on the Chicago Board Options Exchange (CBOE) in February 1994.

Since the stocks represented in the NASDAQ-100 Index can be very volatile, the prices of NASDAQ-100 Index options can also vary significantly.

There are several ways you can invest in the NASDAQ-100 index:

• By purchasing contracts of NASDAQ-100 Index Options (NDX). Since each options contract controls 100 shares, you could leverage $150,000 of equity (assuming a NASDAQ-100 Index price of $1,500) with a single NDX contract;
• By buying mini-NDX index options (MNX). The price of a MNX option is calculated as 1/10 of the value of the NASDAQ-100 Index. Assuming a mini-NDX contract costs $1,500, you could control $15,000 of equity (a multiplier of 100) with a single MNX contract;
• You can trade the NASDAQ-100 Tracking Stock (QQQQ). The value of one QQQQ share generally approximates 1/40 of the current value of the NASDAQ-100 index. For example, if the current price of the NDX is $1,500, the QQQQ price would be approximately $37.50 per share;
• You can invest in options on the NASDAQ-100 Index Tracking Stock (QQQQ options). If a QQQQ trades at $37 per share, one option contract would control $3,700 of equity (a multiplier of 100).

QQQQ Options are the most liquid option currently traded on the market. We recommend them as a relatively low risk way of leveraging a part of your trading capital.