Nasdaq

American stock exchange in New York City

The official logo of Nasdaq

The Nasdaq Stock Market is an American stock exchange based in New York City. It is ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange. The Nasdaq is known for its high concentration of technology companies and is often seen as a barometer for the technology sector.

History

The Nasdaq was founded in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). It was the world's first electronic stock market, providing a computerized system for trading securities. The Nasdaq began operations on February 8, 1971, with 50 companies and a volume of 2.5 million shares.

Development and Growth

The Nasdaq Composite Index

In its early years, the Nasdaq was primarily a quotation system and did not provide a way to perform electronic trades. However, it quickly grew in popularity and became a major player in the stock market. By the 1980s, the Nasdaq had become a full-fledged stock exchange, offering electronic trading and a wide range of services.

The Nasdaq played a significant role in the dot-com bubble of the late 1990s, as many technology companies went public and saw their stock prices soar. The Nasdaq Composite Index, which tracks the performance of all stocks listed on the Nasdaq, reached a peak of 5,048.62 on March 10, 2000, before the bubble burst.

The Nasdaq Composite during the dot-com bubble

Market Structure

The Nasdaq operates as a dealer market, where market participants trade through a network of computers rather than on a physical trading floor. It uses a system of market makers who provide liquidity by buying and selling stocks at publicly quoted prices.

The Nasdaq is divided into three market tiers:

• Nasdaq Global Select Market
• Nasdaq Global Market
• Nasdaq Capital Market

Each tier has different listing requirements, with the Global Select Market having the most stringent criteria.

Indices

The Nasdaq is home to several important stock indices, including:

• Nasdaq Composite: Includes all stocks listed on the Nasdaq.
• Nasdaq-100: Comprises 100 of the largest non-financial companies listed on the Nasdaq.

Technology and Innovation

The Nasdaq MarketSite in Times Square

The Nasdaq is known for its technological innovations in the stock market. It was the first exchange to offer electronic trading and continues to be a leader in market technology. The Nasdaq MarketSite in Times Square is a symbol of its presence in the financial world.

Related pages

• New York Stock Exchange
• Stock market
• Dot-com bubble
• Financial Industry Regulatory Authority