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Market Structure

QQQ

The Invesco QQQ ETF, tracking the 100 largest non-financial companies on the Nasdaq. Heavily weighted toward tech giants like Apple, Microsoft, Nvidia, and Amazon.

What is QQQ?

QQQ is the ticker symbol for the Invesco QQQ Trust, an ETF that tracks the Nasdaq-100 index. The Nasdaq-100 includes the 100 largest non-financial companies listed on the Nasdaq exchange. Because the Nasdaq is where most technology companies list, QQQ is heavily weighted toward tech.

Top holdings

QQQ is dominated by a handful of mega-cap tech companies. The top holdings typically include Apple, Microsoft, Nvidia, Amazon, Meta, Alphabet (Google), Tesla, and Broadcom. These companies alone can make up over 50% of the fund's weight.

QQQ vs SPY

  • QQQ is more volatile: because it is concentrated in tech, it swings more than SPY on any given day. Good for day traders who want bigger moves
  • QQQ outperforms in tech rallies: when tech is leading the market, QQQ outperforms SPY significantly
  • QQQ underperforms in risk-off markets: when money rotates out of tech into value stocks, energy, or financials, QQQ drops harder than SPY
  • No financials: QQQ excludes financial companies, so it does not track banks or insurance companies

How traders use QQQ

  • Tech sector gauge: if QQQ is underperforming SPY, money is rotating out of tech. If QQQ is leading, tech is in favor
  • Day trading: QQQ has excellent liquidity and tighter percentage-based price action than most individual tech stocks
  • Options trading: QQQ options are among the most liquid in the world, second only to SPY
  • QQQ vs individual tech stocks: trading QQQ gives you tech exposure without the single-stock risk of earnings misses, product failures, or CEO scandals
When you hear "tech is selling off," check QQQ. When you hear "the Nasdaq is at all-time highs," they are talking about the index that QQQ tracks. SPY tells you what the broad market is doing. QQQ tells you what tech is doing.

Related Terms

ETF (Exchange-Traded Fund)

A fund that trades on an exchange like a stock, holding a basket of assets such as stocks, bonds, or commodities. SPY and QQQ are ETFs.

Index

A measurement of a section of the stock market. The S&P 500, Nasdaq Composite, and Dow Jones are the three most watched indexes.

S&P 500

An index of the 500 largest publicly traded US companies, weighted by market cap. The most widely used benchmark for overall US stock market performance.

SPY

The SPDR S&P 500 ETF. The most traded security in the world, tracking the 500 largest US companies. When traders say "the market," they usually mean SPY.