Economics

What is NASDAQ?

NASDAQ, or the National Association of Securities Dealers Automated Quotations, is the second largest stock exchange in the world.

What Is NASDAQ?

NASDAQ is a global electronic marketplace for trading securities, particularly those issued by technological firms. It is the world’s second largest stock exchange market by market capitalization after the New York stock exchange. NASDAQ was established by the National Association of Securities Dealers (NASD) to allow investors to trade on a computerized platform that was speedy and transparent. On February 8, 1971, it began operations. The term “NASDAQ” refers to a Nasdaq Composite which is an index of more than 300 stocks that have been listed on the trading platform which includes major technological firms such as Google, Apple, Microsoft, and Intel.

Formation Of NASDAQ

Between 2000 and 2001, NASD divested itself by selling its shares in NASDAQ. It is currently owned and operated by Nasdaq Inc. In 2002, the company listed (Nasdaq Inc.) was listed on the NASDAQ under the symbol NDAQ. NASDAQ boasts of being the world’s first electronic stock market. It initially began operation as a quotation system, but it did not provide a platform for trading the stocks. The NASDAQ Stock Market was unpopular among stock brokers because helped lower the difference between the bidding and asking price of stocks, a difference that had benefited the brokers. Further development in NASDAQ allowed it to take over the major trades that were conducted over the counter. Over the years, NASDAQ transformed into a stock market as trading volumes increased and the systems became automated. It was the first stock market in the US to trade online. The company attracted major technological firms which promoted the platforms and helped to modernize the platform. Its main index is the NASDAQ Composite.

The NASDAQ Composite

NASDAQ’s stock market index is known as the NASDAQ Composite. It is an index of the common stocks securities that have been listed on the market. It is one of the three most-followed indices in the US stocks market, the other being the S&P 500 the Dow Jones Average. The NASDAQ composite is heavily weighted towards technological firms.

NASDAQ 100 Index

The Nasdaq 100 index is an index that includes the 100 largest domestic and international non-financial firms listed on the Nasdaq based on the market capitalization. The index contains firms in trade, telecommunication, software, biotechnology, and computer hardware. Individual investors gain exposure to this index by acquiring the exchange-traded funds (ETFs) which tracks the performance of the index.

Current Status Of NASDAQ

As of March 2017, more than 3,100 companies were listed on NASDAQ, with more than 2 billion shares being traded daily. Since 2000, NASDAQ has traded more than 1,044 IPOs, more than any other trade market in the US. As at March 20, 2017, the most profitable company in the US was Apple, who was trading its shares for $141.50 per share on NASDAQ. As of June 2015, the annual growth rate of the market was 9.24%. The pre-market session begins at 4:00 am to 9:30 am Eastern standard time, and regular trading starts from 9:30 am and continues to 4:00 pm.

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