About the NASDAQ Stock Exchange
One of the most popular and well-known stock exchanges in the world is the NASDAQ Stock Exchange (standing for the National Associate of Securities Dealers Automated Quotations), which is based in New York. The world’s most significant stock indices are found here, with a larger weighting towards technology and fast-growing stocks than is found on the New York Stock Exchange.
The NASDAQ Stock Exchange is the 2nd largest stock exchange in the world (when it comes to market capitalisation), and on this page you’ll find a list of the companies whose stocks trade on the exchange, a summary of its history, the main indices that track the NASDAQ, and the performance of today’s tradable stocks.
The original founding of the NASDAQ was in 1971, with the exchange owned by Nasdaq, Inc. When it originated, it was the very first stock exchange worldwide that was electronic, and it was set up by the National Association of Securities Dealers. Back then, Apple and Dell, Microsoft, and Cisco were all drawn to NASDAQ because of their use of the all-electronic trading system. Nowadays, the National Association of Securities Dealers is known as the Financial Industry Regulatory Authority.
NASDAQ was first an electronic quotation system, with no way to perform automatic trades. It took time for the world to catch up, and the NASDAQ Stock Market was initially unpopular with brokers, as their method of lowering the bid-ask spread reduced their profits massively, leaving the exchange as a relatively unfavourable place to trade. Eventually, the NASDAQ Stock Market took over most of the significant trades executed by the over-the-counter trading system, and many of the securities traded today still use this system.
Over the years, The NASDAQ Stock Market continued to grow, implementing trade reporting and automated trading systems, and shares in the exchange were up 46% by 1991. The NASDAQ was the first Exchange to embrace online trading by 1998, with many new dot-com companies coming up and coming. The London Stock Exchange welcomed the NASDAQ in 1992 to form the very first intercontinental linkage of capital markets. By the Millennium, the National Association of Securities Dealers spun off the NASDAQ Stock Market. The aim here was to form a public company, and in 2002, Nasdc, Inc became a public company, too.
The status of the NASDAQ Stock Market changed in 2006 to a licensed securities exchange, later merging with OMX in 2010, expanding its global footprint with this Nordic exchange operator. This involved combining the exchanges in Paris, Brussels, Amsterdam, and Lisbon into what is now called the Euronext exchange. By February 2011, NASDAQ was valued at $5.78 billion.
The NASDAQ made headlines again in November 2016 with the appointment of the first female CEO to run a significant exchange in the US with Adena Friedman. The exchange at that point facilitated over 1.8 billion trades every day, and to this day there is a larger trading volume on the NASDAQ than any other stock exchange in the US. The only reason it’s second to the NYSE is because the New York Stock Exchange has a higher market capitalisation.
There is no trading floor with the NASDAQ, and they conduct all of the business via electronic and phone systems. Stocks continue to be bought by brokers through the market maker, and these deal with specific stocks themselves.
The two main indices used to track the performance of the NASDAQ exchange are the NASDAQ Composite Index and the NASDAQ 100. The former of these follows all the stocks listed on the exchange, whereas the latter is refined to the 100 largest companies.
This is a more complicated question than with other exchanges. This is because there are three market tiers for NASDAQ, and the listing requirements for each differ significantly. The tiers and company numbers include:
- The Global Select Market: this has stocks of 1,200 companies both in the US and internationally. The companies using the Global Select Market are in the top tier, passing stringent listing requirements, and annual surveys take place by the NASDAQ Listing Qualifications Dept.
- The Global Market: this consists of 1,450 stocks owned by international and US companies. It’s considered to be a mid-cap market, so in the middle tier.
- The Capital Market: this used to be known as the SmallCap Market. NASDAQ changed the name, and this is the list of companies with much smaller market capitalisations than others.