nasdaq

NASDAQ and everything you need to know about it

deltafx writer 10 July 2021

Did you know that NASDAQ is the world’s largest electronics market that operates in the heart of America? Among those who trade in the stock market, few people have not heard NASDAQ’s name. In general, top-rated and universal NASDAQ and Dow Jones stocks are well known among traders. But what does the NASDAQ acronym stand for? When did it first appear, and what was the purpose of its foundation? What are the different types of NASDAQ? If you are looking for the right answers to these questions, you must read this article.

History

The NASDAQ stands for National Association of Securities Dealers Automated Quotations. This famous stock market was established on February 8th, 1971. At first, there were no investors to trade stocks directly. So instead, it used an automated data collection process to provide the latest stock trading prices on other stock exchanges. Then it made investors able to use this information to trade stocks in other stock markets.

 On the other hand, NASDAQ was more involved in stock trading outside the New York Stock Exchange or other stock markets. These stocks, which were under the focus of Nasdaq, are known as over-the-counter (OTC). Due to the history of this market for offering such stocks, some people still remember it as the OTC market.

Over time, NASDAQ became the world’s first electronic stock market and the largest exchange office. It turned into a trading platform for many stocks previously traded on sites other than official stock exchanges. Currently, if companies want to offer their shares in this market, they must meet several conditions.

What is NASDAQ?

Unlike many other exchanges, NASDAQ does not have a physical place for trading. All stocks in this market are traded electronically through an automatic computer network.

This market has attracted some of the world’s prominent super companies. Many of these companies’ shares consist of shares of advanced software companies, computers, and Internet companies. However, the shares of companies in other industries are also traded in this market.

In the following, you can see some of these prominent companies:

  • Apple
  • Amazon
  • Microsoft
  • Facebook
  • Gilead Sciences
  • Starbucks
  • Tesla
  • Intel

As mentioned before, many super companies in the field of technology focus on this stock market. Therefore, it experiences many fluctuations compared to other stock markets. It is also the second-largest stock exchange globally, which operates based on the capital market, offering stock exchange and OTC.

The NASDAQ index consists of two types, and we will explain them in the following.

NASDAQ composite index

The NASDAQ Composite Index dates back to the establishment time (1971) of the Nasdaq. This index, which indicates the status of shares traded in this stock market, includes more than 300 American companies.

NASDAQ 100 index

This index was established in 1985 and, over time, turned into the most prominent growth index of companies. As its name suggests, it is a major stock market index that includes more than 100 of the world’s largest non-financial businesses. This index measures the total fluctuations of its subsidiaries in the market. That’s why it is a weighted system. Different companies in different sectors such as technology, retail, and health care fall into this category.

NASDAQ 100

More facts about NASDAQ:

  • The development of technologies and the advent of the Internet made NASDAQ the first stock exchange for online trading through the website. This website could also store records in its cloud space.
  • It was the first electronic trading stock market.
  • It was also the first market to sell its technology to other exchanges.
  • In 2008, this stock market was merged with the Scandinavian stock market (OMX ABO).
  • This market provided the requirements of trading Bitcoin.
  • Due to the conditions provided by this stock market, more than 3000 of the world’s largest companies list their shares here.

From a business viewpoint, this index has been continuously rising since the global financial crisis of 2008. So, investing in it can make your trading portfolio more stable.

Trading NASDAQ stocks

As we said initially, the shares of big companies like Apple or Tesla are available for trading on this index. This is why many people are interested in investing in it. But how should we invest?

If you want to buy and sell these shares, you must first choose a reputable broker. Brokers allow you to invest in NASDAQ as an intermediary. It would be best to make sure that the broker has made it possible for clients to trade these stocks on its trading platform. Then you should compare the services and facilities provided by different brokers to select the best Forex broker. DeltaFX, as one of the most reputable and experienced Forex brokers, allows you to invest in NASDAQ easily. Just by opening an account in DeltaFX, you can buy the shares of American companies.

Conclusion

In this article, we attempted to explain everything about this stock market. The stock market is probably the most famous and oldest financial market. Due to offering the shares of large and various companies, this market gradually continued to operate at a broader level. In the meantime, we should remember that the shareholders have also contributed to the growth and expansion of this market with their high volume of transactions. To make a profit in this market, you will need to know and understand this market. You can learn the necessary topics about Forex and the stock market in DeltaFX broker.

FAQ

❓ What is the difference between the NASDAQ index and a NASDAQ stock market?

✅ When we talk about the NASDAQ index, we mean the general trend of the NASDAQ stock exchange, which is like the Dow Jones index.

❓ What makes NASDAQ different from other stock markets in the world?

✅ As you know, the NASDAQ stock exchange includes about 3321 different companies shares. Therefore, it has the highest average stock sold and the highest daily trading volume among other stock markets in the world.

❓ What does it mean when the NASDAQ index is written with the phrase “X NASDAQ”?

✅ Most of the securities in the NASDAQ index contain 4 or 5 letters. But the fifth letter indicates that the securities will not be offered in the form of shares.

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