An Overview Of The Nasdaq Stock Market

This article will take a look at one of the first electronic stock markets in the world. Currently the largest in terms of volume, the Nasdaq Stock Market was founded in 1971 by a group called the NASD or National Association of Securities Dealers. The stock market was run under a corporation called the Nasdaq Stock Market Inc.

Starting off as nothing more than a computerized bulletin board it is operated under the guidelines of the SEC or Securities and Exchange Commission. Today if you consider the number of shares traded it is the largest Electronic Trading System in the world.

Prior to Nasdaq, brokers were able to earn a hefty brokerage because the difference between the share bid price and ask price was high. Nasdaq, on account of its electronic trading, reduced this difference and hence the brokerage which was the bread of share brokers. As a result Nasdaq became unpopular with brokers to begin with.

Nasdaq has changed the way that share markets operate and function. It has become very popular with the common investor. Accessing trading facilities on Nasdaq is very user friendly and convenient. Nasdaq Stock Market facilitates uninterrupted trading. It has changed the conventional notions about the method in which shares are traded.

There are a total of 5100 companies which are listed on Nasdaq. These companies constitute large corporations as well as venture capital based enterprises. Nasdaq is also well known because a number of high end technical stock companies are listed on this stock market. The most notable amongst them being Microsoft, Dell, Cisco and Intel.

Indices at Nasdaq.

Nasdaq has introduced specialization in the trading of stock and bonds at a very high level. The indices which are used at Nasdaq have been created with the need of particular sectors , company size and market capitalization in mind.

A few of these indices are listed below

Nasdaq Biotechnology Index As the description suggests this index is calculated after evaluating the shares of companies which are classified as either biotechnology or pharmaceuticals. The list of companies keep changing each year.

Nasdaq 100 This index considers the first 100 largest companies listed with Nasdaq. The companies which are listed can be either domestic or international. As such this index is not exclusively an indicator of performance of domestic companies.

Nasdaq Composite This index is called composite simply because it is the most broad based of indices which are sponsored by Nasdaq. This is the most prestigious index available with Nasdaq.

Quite a few of the Nasdaq indexes are based on market capitalization.

We hope you have found this article useful. In case you are an investor or broker wishing to operate in the US studying the Nasdaq Stock Market is the place to begin.