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The NASDAQ Composite index.
The NASDAQ (acronym for National Association of Securities Dealers Automated Quotations system) is an American stock market. It was founded in 1971 by the National Association of Securities Dealers (NASD), who divested themselves of it in a series of sales in 2000 and 2001. It is owned and operated by The Nasdaq Stock Market, Inc. the stock of which was listed on its own stock exchange in 2002. NASDAQ is the largest electronic screen-based equity securities market in the United States. With approximately 3,200 companies, it lists more companies and on average trades more shares per day than any other U.S. market.[1] With the impending purchase of the Nordic-based operated exchange OMX, following its agreement with Borse Dubai, Nasdaq is poised to capture 47% of the controlling stake in the aforementioned exchange, thereby inching ever closer to taking over the company and creating a trans-Atlantic powerhouse.

History

When it began trading on February 8, 1971, the NASDAQ was the world's first electronic stock market. At first, it was merely a computer bulletin board system and did not actually connect buyers and sellers. The NASDAQ helped lower the spread (the difference between the bid price and the ask price of the stock) but somewhat paradoxically was unpopular among brokerages because they made much of their money on the spread.

NASDAQ was the successor to the Over the Counter (OTC) and the "Curb Exchange" systems of trading. As late as 1987, the NASDAQ exchange was still commonly referred to as the OTC in media and also in the monthly Stock Guides issued by Standard & Poor's Corporation.[2]

Over the years, NASDAQ became more of a stock market by adding trade and volume reporting and automated trading systems. NASDAQ was also the first stock market to advertise to the general public, highlighting NASDAQ-traded companies (usually in technology) and closing with the declaration that NASDAQ is "the stock market for the next hundred years." Its main index is the NASDAQ Composite, which has been published since its inception. However, its exchange-traded fund tracks the large-cap NASDAQ 100 index, which was introduced in 1985 alongside the NASDAQ 100 Financial Index.

Until 1987, most trading occurred via the telephone, but during the October 1987 stock market crash, market makers often didn't answer their phones. To counteract this, the Small Order Execution System (SOES) was established, which provides an electronic method for dealers to enter their trades. NASDAQ requires market makers to honor trades over SOES.[3]

Business

NASDAQ allows multiple market participants to trade through its Electronic Communication Networks (ECNs) structure, increasing competition. The Small Order Execution System (SOES) is another NASDAQ feature, introduced in 1987, to ensure that in 'turbulent' market conditions small market orders are not forgotten but are automatically processed. With approximately 3,200 companies, it lists more companies and, on average, its systems trade more shares per day than any other stock exchange in the world. NASDAQ will follow the New York Stock Exchange in halting domestic trading in the event of a sharp and sudden decline of the Dow Jones Industrial Average. [4]

Market Share

As of 1 March 2007, accounts for about 14-15% of the shares traded. For Tape C securities, it accounts for approximately 45-98% of the trading volume. [5]

Fees

NASDAQ has a sliding fee system that offers lower liquidity removal fees and more favorable added-liquidity rebates based on how much trading volume the market participant executes on the NASDAQ system.

Quote availability

NASDAQ quotes are available at three levels. Level I shows the highest bid and lowest offer — the inside quote. Level II shows all public quotes of market makers together with information of market makers wishing to sell or buy stock and recently executed orders. Level III is used by the market makers and allows them to enter their quotes and execute orders.[6]

Indices

Markets

See also

References

1. ^ NASDAQ Performance Report. NASDAQ Newsroom. The Nasdaq Stock Market (2007-01-12). Retrieved on 2007-02-15.
2. ^ Standard & Poor's Corporation, Stock Guide, Year End 1987 issue
3. ^ Wells, Rob. "'Market for Next 100 Years' is 25", Associated Press. 
4. ^ Circuit Breaker Trigger Points and Trade Halt Durations.
5. ^ Market Volume Summary.
6. ^ Nasdaq Level I, Level II , Level III Quotes.

External links

 •  • [ e]
Major United States stock market indices
• Dow Jones Industrial Average (30 large stocks; popular indicator)
• NYSE Composite Index (all companies on the NYSE)
• Nasdaq Composite Index (all companies on the NASDAQ; technology-heavy)
• NASDAQ-100 Index (100 large NASDAQ non-financial stocks)
• S&P 500 Index (500 large companies; general market analysis)
• Russell 2000 Index (small-cap stocks)
• Wilshire 5000 Index (total U.S. market)



Stock Market
Types of Stocks
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Participants:Market maker
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Stock Valuation
Trading Theories:Dow Theory | Elliott Wave Theory | Fundamental analysis | Technical analysis
colspan="4" align="left"| Mark Twain effect | January effect | Efficient market hypothesis Arbitrage_pricing_theory
Stock Pricing:Dividend yield | Gordon model | Income per share | Book value | Earnings yield | Beta coefficient
Ratios:Financial ratio | P/CF ratio | PE ratio | PEG ratio | Price/sales ratio | P/B ratio
Stock Related Terms
Dividend | Stock split | Growth stock | Investment | Speculation | Trade | Day trading
Motto
"In God We Trust"   (since 1956)
"E Pluribus Unum"   ("From Many, One"; Latin, traditional)
Anthem
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A stock market is a market for the trading of company stock, and derivatives of same; both of these are securities listed on a stock exchange as well as those only traded privately.
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Year 1971 (MCMLXXI
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NASD, Inc. (formerly known as the National Association of Securities Dealers) is an industry organization representing persons and companies involved in the securities industry in the United States.
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divestment or divestiture is the reduction of some kind of asset for either financial goals or ethical objectives. A divestment is the opposite of an investment.

Divestment for financial goals


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Nasdaq Stock Market, Inc.

Public (NASDAQ:  NDAQ )
Founded 1971
Headquarters New York, United States

Key people Robert Greifeld, CEO[1] David P. Warren, CFO Anna M. Ewing, CIO
Industry Stock exchange
Revenue USD 1.
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economy of New York City is one of the largest regional economies in the United States. The city is a global center for business and commerce. It is one of the leading financial cities of the world and a premier headquarters location for leading global financial services companies.
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February 8 is the 1st day of the year (2nd in leap years) in the Gregorian calendar. There are 0 days remaining.

Events

  • 421 - Constantius III becomes co-Emperor of the Western Roman Empire.

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19th century - 20th century - 21st century
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1968 1969 1970 - 1971 - 1972 1973 1974

Year 1971 (MCMLXXI
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Over-the-counter (OTC) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties. It is the opposite of exchange trading which occurs on futures exchanges or stock exchanges.
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Standard & Poor's

Division of The McGraw-Hill Companies
Founded 1941
Headquarters New York City, United States

Key people Deven Sharma (President)
Industry Financial Services
Divisions Capital IQ
Website www.standardandpoors.
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The Nasdaq Composite is a stock market index of all of the common stocks and similar securities (e.g. ADRs, tracking stocks, limited partnership interests) listed on the NASDAQ stock market, meaning that it has over 3,000 components. It is highly followed in the U.S.
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The NASDAQ-100 is a stock market index of 100 of the largest domestic and international non-financial companies listed on the NASDAQ stock exchange. It is a modified market value-weighted index; the companies weights in the index are based on their market capitalization, with
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20th century - 21st century
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Year 1985 (MCMLXXXV) was a common year starting on Tuesday (link displays 1985 Gregorian calendar).
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Year 1987 (MCMLXXXVII
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Black Monday is the name given to Monday, October 19, 1987, when the Dow Jones Industrial Average (DJIA) dropped by 508 points to 1739 (22.6%),[1] and on which similar enormous drops occurred across the world.
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A market maker is a firm who quotes both a buy and a sell price in a financial instrument or commodity, hoping to make a profit on the turn or the bid/offer spread.
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The Small Order Execution System (SOES) is a system to facilitate clearing trades of low volume on NASDAQ.

Establishment

The lack of liquidity after the 1987 market crash led NASDAQ to implement a mandatory system to provide automatic order execution for individual traders
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electronic communication network (ECN) is the term used in financial circles for a type of computer system that facilitates trading of financial products outside of stock exchanges. The primary products that are traded on ECNs are stocks and currencies.
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Competition is the rivalry of two or more parties over something. Competition occurs naturally between living organisms which coexist in an environment with limited resources. For example, animals compete over water supplies, food, and mates.
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The Small Order Execution System (SOES) is a system to facilitate clearing trades of low volume on NASDAQ.

Establishment

The lack of liquidity after the 1987 market crash led NASDAQ to implement a mandatory system to provide automatic order execution for individual traders
..... Click the link for more information.
19th century - 20th century - 21st century
1950s  1960s  1970s  - 1980s -  1990s  2000s  2010s
1984 1985 1986 - 1987 - 1988 1989 1990

Year 1987 (MCMLXXXVII
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New York Stock Exchange (NYSE), nicknamed the "Big Board", is a New York City-based stock exchange. It is the largest stock exchange in the world by dollar volume and, with 2,764 listed securities[1], has the second most securities of all stock exchanges.
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The Dow Jones Industrial Average (NYSE:  DJI , also called the DJIA, Dow 30, or informally the Dow Jones or The Dow) is one of several stock market indices created by nineteenth century Wall Street Journal
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March 1 is the 1st day of the year (2nd in leap years) in the Gregorian calendar. There are 0 days remaining.

Events


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A national market system plan (or NMS plan) is a structured method of transmitting securities transactions in real-time. In the United States, national market systems are governed by section 11A of the Securities Exchange Act of 1934.
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