What are the differences between QQQQ
and SPY options signals?
Our system generates signals for QQQQ
and SPY options. In issuing signals for both trading vehicles, we
apply the same technical indicators and use similar analysis
methods; however, you should be aware of some of the differences and
similarities between our QQQQ and SPY options signals:
QQQQ options are more actively
traded than SPY options. As a result, it is easier to open and
close a position when trading QQQQ options;
Near-the-money QQQQ options are
generally cheaper than SPY options (for the same expiration
NASDAQ 100 and QQQQ stock tend to
be more volatile than the S&P 500 index and SPY stock;
Our system is geared toward the
generation of conservative signals for SPY options (as opposed
to QQQQ options). As a result:
In our system, a much stronger
move is required to trigger a SPY options signal than to
generate a QQQQ options signal;
We issue fewer SPY options
signals per month than we do for QQQQ options. Whereas our
system may generate up to five QQQQ options signals a month,
it is very rare that you would see more than a single SPY
options signal per month;
Our system tends to stay
longer in SPY options trades than in QQQQ options trades;
Generally speaking, stop
losses for SPY options are less forgiving (i.e., tighter)
than for QQQQ options. For instance, while a QQQQ options
signals stop-loss may be set as far as 50% away from the
opening price, SPY options stop losses will rarely be more
than 35% away from our trade entry price.
The same technical indicators and
similar technical analysis approaches are used to generate
signals for both the QQQQ and SPY options;
For both QQQQ and SPY, we issue
signals for options with 2-3 months of time remaining until
At the moment a signal is issued,
both QQQQ and SPY options are in-the-money.
Based on the comparison provided
above, we consider QQQQ options trades to be more aggressive than
those resulting from our SPY options signals. Depending on your
personal risk tolerance, you can use different trading strategies.
For instance, investing only in QQQQ options signals is a more
aggressive approach than spreading an options portfolio between our
two signals. Conversely, investing your money solely in SPY options
would be considered the most conservative approach.
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