First Trust Nasdaq-100 Select Equal Weight ETF (QQEW) Covered Calls
The First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) is a passively managed ETF that provides exposure to the NASDAQ-100 Index. Unlike the standard market-cap-weighted NASDAQ-100, which is heavily tilted toward the largest technology giants, QQEW weights each of its 100 constituents equally. This approach reduces concentration risk and provides a more balanced representation of the innovative companies within the index.
You can sell covered calls on First Trust Nasdaq-100 Select Equal Weight ETF to lower risk and earn monthly income. Born To Sell's covered call screener gives you customized search capabilities across all possible covered calls but here are a couple of examples for QQEW (prices last updated Fri 4:16 PM ET):
| First Trust Nasdaq-100 Select Equal Weight ETF (QQEW) Stock Quote | ||||||
|---|---|---|---|---|---|---|
| Last | Change | Bid | Ask | Volume | P/E | Market Cap |
| 129.96 | -0.41 | 129.34 | 131.28 | 54K | - | 1.9 |
| Covered Calls For First Trust Nasdaq-100 Select Equal Weight ETF (QQEW) | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Net Debit | Return If Flat |
Annualized Return If Flat |
|
| Mar 20 | 130 | 0.05 | 131.23 | -0.9% | -41.1% | |
| Apr 17 | 130 | 0.25 | 131.03 | -0.8% | -8.1% | |
| Subscribers get access to the full covered call chain, and more features. | ||||||
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The First Trust NASDAQ-100 Equal Weighted Index Fund (QQEW) offers a distinct alternative to traditional tech-heavy growth funds. By assigning an equal weight to every company in the NASDAQ-100, the fund ensures that smaller or mid-sized constituents have as much influence on the portfolio’s performance as the dominant mega-cap technology firms. This weighting methodology essentially creates a "small-cap tilt" within the context of the high-growth NASDAQ-100 universe.
Investors utilize QQEW to capture the innovation and growth potential of the NASDAQ-100 while avoiding the volatility that comes from being over-exposed to a handful of massive tech companies. The fund rebalances periodically to restore the equal-weight structure, a process that forces the fund to sell winners and buy underperforming stocks, which can be an effective way to manage valuation risk in a momentum-driven sector.
Competitive Landscape
QQEW occupies a unique niche, as most broad-market NASDAQ-100 funds are market-cap-weighted. Its competitive positioning relies on its "Equal-Weight" methodology. Competitive differentiators include:
- Concentration Risk Mitigation: By removing the dominance of mega-cap tech, QQEW provides a more balanced exposure to the diverse growth sectors within the NASDAQ-100.
- Rebalancing Discipline: The mechanical process of returning to equal weights captures the "mean-reversion" effect, potentially benefiting from stocks that are currently undervalued relative to their peers.
- Peer Alternatives: While QQEW is unique in its equal-weight approach, it is often compared to the massive market-cap-weighted funds like the Invesco QQQ Trust and the Invesco NASDAQ 100 ETF.
Market Positioning and Future Trends
Current market focus is often centered on the sustainability of the "winner-take-all" dynamics in the technology sector. As regulatory scrutiny and valuation concerns occasionally dampen the performance of the largest mega-caps, investors look to funds like QQEW to gain exposure to the same growth universe without the same degree of top-heavy risk.
The roadmap for this strategy assumes that the long-term drivers of the NASDAQ-100—innovation, productivity, and digital transformation—are not limited to just the largest firms. By systematically diversifying across the entire index, QQEW provides a transparent and data-driven way for investors to participate in the growth of the broader NASDAQ-100 ecosystem.
| Top 10 Open Interest For Mar 20 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA covered calls | 6. | QQQ covered calls | 1. | CTMX covered calls | |
| 2. | SLV covered calls | 7. | EWZ covered calls | 2. | PL covered calls | |
| 3. | SPY covered calls | 8. | IWM covered calls | 3. | RCAT covered calls | |
| 4. | EEM covered calls | 9. | FXI covered calls | 4. | AXTI covered calls | |
| 5. | IBIT covered calls | 10. | KWEB covered calls | 5. | LUNR covered calls | |
Want more examples? QPX Covered Calls | QQH Covered Calls
Risk Disclosure: Trading options involves significant risk and is not suitable for all investors. The information provided on this website is for educational and informational purposes only and does not constitute financial, investment, tax, or legal advice. Nothing contained on this site is an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities or financial instruments.
Covered Call Strategy Risks: While covered call writing is often considered a conservative options strategy, it is not without risk. By selling a covered call, you are limiting your potential upside profit from the underlying stock. You remain exposed to the full downside risk of owning the underlying stock. In the event of a significant decline in the stock price, the premium received may not be sufficient to offset your losses.
No Guarantee of Performance: Past performance is not indicative of future results. Any examples, calculations, or hypothetical scenarios presented on this site are for illustrative purposes only and do not guarantee future returns or outcomes. Market conditions, liquidity, and trading system failures can affect your ability to execute trades at desired prices.
You should consult with a qualified professional advisor and conduct your own due diligence before making any investment decisions. By using this website, you acknowledge that you are responsible for your own investment decisions and agree to release this site and its affiliates from any liability relating to your use of this information. See the OCC's Characteristics and Risks of Standardized Options for more info.
