CBOE Opens QQQ Options Trading: Let the Games Begin

Options trading on the popular Nasdaq 100 unit trust (QQQ Quote), whose exclusive residence has been the American Stock Exchange since 1999, has another home today and will add some more dwellings soon.

Today the Chicago Board Options Exchange, the nation's largest options exchange, began trading options on the QQQ, competing directly for orders with the Amex, the second-largest options exchange. The Philadelphia Stock Exchange, Pacific Exchange and electronic International Securities Exchange are seeking to list the QQQ options soon.

The battle for QQQ volume is likely to force specialists and market makers to narrow spreads between the bid and ask prices, which is good for investors, and pay brokerage firms to send orders to their respective exchanges. The Nasdaq 100 unit trust became wildly popular as investors sought a one-stop investment to play the Nasdaq's strength in 1999 and early 2000. Despite the Nasdaq's weakness, the QQQ has stayed a vibrant product, in both its equity and options forms. Specialists and market makers are responsible for maintaining orderly markets. ...