“As on most days, the floor of the American Stock Exchange was quiet when trading opened one recent morning — except for one frenzied corner of the floor,” writes Kate Kelly in today’s Wall Street Journal.

“There, more than 20 brokers stood on wooden risers, screaming and hand-signaling orders for the QQQ, the traded security comprising the 100 largest Nasdaq nonfinancial stocks that has become a wildly popular proxy for big technology stocks. Since the Qs were introduced in 1999 by the Amex, they have breathed new life into the embattled exchange, accounting for nearly half its trading volume.”

“But now, the Amex will face a major challenge on its franchise product when the New York Stock Exchange begins trading in the QQQ later this month.”

“Wall Street firms are debating whether to continue trading the QQQ on the Amex floor or to switch their QQQ trading to the Big Board, says David Memmott, head of listed trading for Morgan Stanley. ‘The Qs have been the most successful thing [the Amex] has done in years,’ he says, adding that Amex marketing executives recently told him that losing business in the Qs was their “No. 1″ worry.”

“The Amex’s business has changed dramatically over the past 10 years. As the Nasdaq Stock Market has become the exchange of choice for many technology and other growth companies, and the NYSE has solidified its position as the major market for big industrial companies, Amex has lost stock listings. To survive, the Amex has changed from its historical focus on individual stocks to a trading center with stocks, options and exchange-traded funds, such as the QQQ.”

“ETFs, which are baskets of stocks wrapped into one easily traded security, were developed by the Amex and have become that exchange’s blue chips. Within the Amex’s ETF family, the QQQ is indisputably king, accounting for about 48% of daily trading volume on the exchange floor.”

” ‘The fact that the NYSE has decided to trade the product is a compliment to our success,’ says Sal Sodano, chairman and chief executive of the Amex. ‘We have to compete, simple as that. We take it as the ultimate compliment.’ “

“The NYSE’s move — which includes trading two of the Amex’s other most-popular ETFs — could chip away at the Amex’s ETF trading volumes and, thus, the transaction and market-data fees the Amex pockets. And there is another threat to the Amex’s QQQ trading volume in the future: Nasdaq — which contracted out listing of the QQQ to the Amex after that exchange merged with Nasdaq’s parent, the National Association of Securities Dealers, in 1998 — may want to take the QQQ listing back when the clock on the Amex’s five-year contract runs out.”