Strategy Guide
QQQ Guide
Last updated: September 2026
Why one basket of 100 companies anchors the strategy: what QQQ is, what concentration costs, and how a system sizes it.
What QQQ actually is
QQQ tracks the Nasdaq 100: the 100 largest non-financial companies listed on the Nasdaq exchange, weighted by market cap. It is not "the tech index" in a formal sense, but technology dominates it, and its top ten holdings can account for half the weight.
That weighting is momentum in disguise. Winners grow inside the index automatically, which is wonderful in a bull market and punishing in a reversal.
Why it works for systematic options
For options strategies the practical qualities matter most: extremely deep liquidity, tight bid-ask spreads, strikes at fine increments, weekly and longer expirations, and decades of clean price history to test against.
One underlying, understood deeply, beats a rotating cast of underlyings understood shallowly. Every rule in the system was tested on QQQ first.
What concentration costs
In 2022 QQQ fell roughly a third while the broader market fell less. Anyone calling QQQ "diversified" should be asked how they explain that year.
A system handles this with sizing and regime gates rather than hope: exposure is earned by conditions, capped by rule, and cut mechanically when the rules say so.
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