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Why do people trade the QQQ symbol on the NASDAQ?

QQQ is a Nasdaq 100 index tracking stock, representing about 1/40th of the index. For more information go to www.amex.com. I assume you want to know why people would trade QQQ rather than buy Nasdaq stocks themselves. The most obvious reason would be transaction costs. If a diversified exposure to Nasdaq stocks is required, it can be achieved in one transaction, compared to many transactions in specific stocks. Another reason will be leverage. However, there is a downside. Leverage means higher risk. Most things in the markets are a trade-off of risk and reward.

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