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Nasdaq is a global electronic securities trading market. Its name was originally an acronym for National Association of Securities Dealers Automated Quotations.
Nasdaq is a global electronic securities trading market. Its name was originally an acronym for National Association of Securities Dealers Automated Quotations. Nasdaq was originally a subsidiary of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA).
Nasdaq was formed as a result of the U.S. Securities and Exchange Commission (SEC) urging NASD to automate the market for securities not listed on the exchange. The result was the first electronic trading system. Nasdaq began operations in 1971. [1]
As mentioned above, Nasdaq is a stock exchange headquartered in New York. It was originally a subsidiary of NASD and officially began operations on February 8, 1971. It is the world's first automated stock exchange. [1]
Nasdaq officially separated from the NASD in 2006 and began operating as a national securities exchange. In 2008, it merged with Scandinavian exchange group OMX to become Nasdaq OMX Group. [2] The company changed its name to Nasdaq, Inc. in 2015. [3]
More than 5,000 companies are listed and traded on the exchange every day. Many of these companies are major technology companies, such as Apple (AAPL) and Microsoft (MSFT).
Since 2006, Nasdaq has consisted of three tiers: Nasdaq Global Select Market, Nasdaq Global Market and Nasdaq Capital Markets. [4]
The exchange operates 29 markets, supporting trading in equities, derivatives, fixed income and commodities in the United States, Canada, Scandinavia and the Baltics. The company also operates a clearing house and five central securities depositories in the United States and Europe. [5] Its trading technology is used by 100 exchanges in 50 countries.
The term "Nasdaq" is also used to refer to the Nasdaq Composite Index. This is an index of more than 2,500 stocks listed on the Nasdaq exchange. The index includes some of the major tech giants such as:
The Nasdaq Composite Index closed at an all-time high of 16,057.44 on November 19, 2021. Since then, the index has fallen more than 23% until April 2022. [7] The Nasdaq Composite fell 13.3% in April 2022, its worst monthly decline since October 2008, when the index fell 17.4% amid the global financial crisis. It closed at 13,787.92 on June 30, 2023. [8]
Important Note: Nasdaq, Inc. is listed on the Nasdaq Stock Market under the symbol NDAQ and has been a component of the S&P 500 Index since 2008.
The Nasdaq computerized trading system was originally designed as an alternative to the inefficient professional dealer system, which was the dominant model for nearly a century. The rapid development of technology has made Nasdaq's electronic trading model the standard for global markets.
For emerging technology companies in the world, listing on exchanges using the latest technology is a no-brainer. As the technology industry grew in prominence in the 1980s and 1990s, the Nasdaq Composite Index became its most widely cited representative.
This made the Nasdaq Composite an index of boom and bust during the dot-com bubble. After rising nearly 150% in the 16 months through March 2000, the Nasdaq Composite subsequently plunged nearly 80% by October 2002.
In November 2016, Chief Operating Officer (COO) Adena Friedman was promoted to Chief Executive Officer (CEO), becoming the first woman to run a major exchange in the United States. [9]
On December 1, 2020, Nasdaq proposed a new rule requiring companies listed on the exchange to report on the diversity of their boards. The rules require companies to include at least one female director and one director from an underrepresented minority or LGBTQ+ on their boards, or publicly explain why they have not done so. The U.S. Securities and Exchange Commission approved board diversity disclosure rules on August 6, 2021. [10]11
Nasdaq generates revenue from customers, including financial institutions, broker-dealers, institutional investors and corporations. Nasdaq's revenue primarily comes from the following fees:
Nasdaq reported total revenue of 1.23 billion for fiscal 2022, which ended December 31, 2022. Revenues, excluding transaction-based fees, were 0.78 per common share in 2022, up from $0.70 in 2021. [12]
Nasdaq is an American stock exchange located in New York City. It officially began operations in February 1971. More than 5,000 companies trade on the exchange, including domestic and international companies. It is the world's first automated exchange. [1]
The Nasdaq 100 is a broad market growth index. It consists of the 100 largest U.S. and international non-financial companies, all of which are listed on the Nasdaq stock exchange based on their market capitalization. Major companies listed include Apple, Dollar Tree, Keurig, Sirius XM Holdings and Zoom Video Communications. Investors interested in taking advantage of the index's returns can do so by investing in mutual funds, exchange-traded funds (ETFs), options, futures and annuities that track and attempt to mimic its performance. [13]14
Apple trades on Nasdaq under the symbol AAPL. The company went public on December 12, 1980, first trading at 190.25 on June 30, 2023.
Nasdaq is one of the major stock exchanges in the United States. More than 5,000 domestic and foreign companies are listed, mainly focusing on the technology sector. The exchange began operations in 1971 and was the world's first automated exchange. The Nasdaq Composite Index, composed of more than 2,500 listed companies, is one of the most watched stock market indexes in the world and is considered a barometer of the U.S. and global economies.
Correction - March 20, 2024: This article has been corrected to state that Nasdaq is composed of three tiers: Nasdaq Global Select Market, Nasdaq Global Market and Nasdaq Capital Market.
[1] Nasdaq. "Nasdaq: 50 Years of Market Innovation."
[2] Nasdaq. "Nasdaq and OMX to Combine."
[3] Nasdaq. "2021 Form 10-K," Page 6.
[4] Nasdaq. "Initial Listing Guide."
[5] Nasdaq. "Trade Global Markets."
[7] Nasdaq. "Nasdaq Composite Index (COMP), Market Activity."
[8] Nasdaq. "NASDAQ Composite Index (COMP)."
[9] Nasdaq. "Nasdaq (NDAQ) Picks President Adena Friedman as New CEO."
[10] U.S. Securities and Exchange Commission. "Securities and Exchange Commission, Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Approving Proposed Rule Changes," pp. 1-4.
[12] Nasdaq. "NASDAQ REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS; DELIVERS STRONG SOLUTIONS BUSINESSES REVENUE GROWTH IN 2022."
[13] Nasdaq. "Quotes For Nasdaq-100 Index."
[14] Nasdaq. "Nasdaq-100 Index."
[15] Apple. "FAQ."
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