QQQuestions about the QQQ

Everything you wanted to know about the Nasdaq 100 tracking stock.
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The

Nasdaq 100

tracking stock is a hot property.

TSC

readers just can't seem to get enough of the new product, which trades on the

American Stock Exchange

under the ticker symbol

QQQ

(QQQ) - Get Report

. Today we answer some follow-up questions from readers who wanted more after our April 6

story on the QQQ and its fellow index-based securities,

SPDRs

(SPY) - Get Report

and

Diamonds

(DIA) - Get Report

.

Launched in March, a single QQQ share represents a stake in a unit investment trust that invests in the largest and most actively traded companies on the

Nasdaq

stock market -- the companies of the Nasdaq 100 index. It's one-stock shopping for a portfolio loaded with popular technology, biotechnology and retail stocks, as well as sizzling Internet plays. Just a few weeks old, the trust already has attracted $1 billion in assets.

SPDRs (pronounced "spiders") are shares in the older and much larger SPDR trust, which tracks the

S&P 500

index. The 6-year-old trust has more than $13 billion in assets.

Diamonds represent ownership in a unit investment trust designed to track the performance of the

Dow Jones Industrial Average

. The 1-year-old Diamond trust has about $500 million in assets.

Now on to your questions:

QQQ Companies

Where can I find the list of all the companies that make up QQQ? -- Fred Sutarjo

Fred,

The Nasdaq-Amex maintains a Web site with information on the Nasdaq tracking stock which includes a list of all the companies and their weighting in the Nasdaq 100. You can find it at

www.nasdaq-100.com.

For more detailed information on the index, including the most recent trade price and current market value of each of the stocks that make up the Nasdaq 100, try

www.nasdaqtrader.com. Click on the blue bar near the top of the page that reads, "Trading Data." Then click to view the Nasdaq 100 and follow directions.

Do Nasdaq 100 and S&P 500 Overlap?

Is there an overlap between the stocks in the S&P 500 and the stocks in the Nasdaq 100? And if there is, can you give an idea of how big the overlap is? -- Thomas Lesgourgues

Thomas,

Thirty of the 100 companies in the Nasdaq 100, representing 61% of the index, also are found in the S&P 500. The same companies make up 13% of the S&P 500.

QQQ Options

Am I correct in assuming that the QQQ shares are the only ones with an options market? -- James Lucas

James,

Yes. The QQQ is the only Amex-traded, index-based product with an equity options market. But this does not mean you can't buy cash-settled index options contracts on each of the indexes tracked by these products.

Translation: Options on the Nasdaq 100 index tracking stock are available on the American Stock Exchange. QQQ options are equity options that are linked to the tracking-stock units and are settled with delivery of the underlying security. These options differ from other index options, which are settled in cash to cover the difference between the strike (or exercise) price and the current value of the index components. There are no similar equity options available on SPDRs and Diamonds. But you can buy cash-settled index option contracts on other exchanges to cover all three of these Amex products.

Can You Short SPDRs and Diamonds?

Can SPDRs and Diamonds be shorted on both up- and downticks like the QQQ? -- Richard Tisch

Richard,

Yes. All three of these securities can be "shorted on a downtick," or sold short in a falling market.

Selling short is a technique used to bet against the market. The short seller will sell borrowed shares of a security, hoping that the price will decline and the borrowed shares can be replaced at a lower price, resulting in a profit for the short seller.

To prevent pools of short sellers from deliberately driving down the price of a stock in order to profit, the

Securities and Exchange Commission's

"Short Sale Rule" requires that securities only be sold short when their stock price is rising, or when the last sale was at a higher price (an uptick) than the preceding sale. SPDRs, Diamonds and QQQ shares are not subject to this rule.

Purchase Info

Where can I buy the QQQ? -- Donald Snider

Donald,

The QQQ is broker-sold. Both discount and full-service brokers sell the Nasdaq tracking stock, which trades all day, just like any other stock. For more information, call 1-800-THE-AMEX or visit its Web site at

www.nasdaq-100.com.

Send your mutual fund questions to

fundforum@thestreet.com, and please include your full name.

TSC Fund Forum aims to provide general fund information. Under no circumstances does the information in this column represent a recommendation to buy or sell funds or other securities.