Nasdaq

Page Summary

Nasdaq is an electronic trading platform where users can trade securities via their computers or smartphones. It stands for National Association of Securities Dealers Automated Quotations and it is a subsidiary of the Financial Industry Regulatory Authority (FINRA). People also use the word ‘’Nasdaq’’ to refer to the Nasdaq Composite, which is an index of over 3,000 stocks listed on the Nasdaq exchange. Big and famous companies like Apple, Microsoft, Meta, and Amazon are part of this index. 

nasdaq-logo

Nasdaq became a stand-alone exchange in 2006, when it merged with the Scandinavian exchange group OMX. It is based in New York and operates in 25 markets. Users can trade stocks, options, fixed-income assets, derivatives, and commodities on Nasdaq. Traders and investors from over 50 countries use it across 90 exchanges. Nasdaq is part of the S&P 500. 

The Nasdaq Trading Platform

The Nasdaq electronic trading platform was an alternative to the ‘’specialist’’ system. All trading platforms used this system before switching to Nasaq’s trading platform. Many technology companies switched to Nasdaq because of it being electronic. Nasdaq later became the standard trading platform for technology companies. The Nasdaq Composite Index went from 1,000 to 5,000 between 1995 and 2000 due to the dot-com boom. The fast gains came to a halt in 2008 due to the financial crisis.

Nasdaq Mergers and Acquisitions

Nasdaq bought the European Accosiation of Securities Dealers Automatic Quotation System (EASDAQ) in 2001, which was its European equivalent and formed NASDAQ Europe. Börse Berlin later acquired NASDAQ Europe and it now operates as Equiduct. 

In 2012 Nasdaq OMX joined the United Nations Sustainable Stock Exchanges, a group of exchanges focusing on sustainable development. In 2016 Adena Friedman was promoted as the new CEO of the exchange as first woman ever to lead a stock exchange. 

Nasdaq Board Diversity Disclosure 

In 2020 Nasdaq proposed the U.S. Securities and Exchange Commission (SEC) to implement a new rule that would require enlisted companies to report the diversity of their board members. This rule would require boards of listed companies to have a minimum of two ‘diverse directors’ of which one self-identifies as female and the other as an underrepresented minority or LGBTQ+. The SEC approved this rule and implemented it earlier this year.

How does the Nasdaq make money?

Nasdaq makes money by charging its clients for market services, technologies, and corporate services. Their client base consists of financial institutions, brokers, and companies. Nasdaq offers them access to the financial markets, provides them data and analytics and asset management services. In 2021 Nasdaq earned over $3,3 billion in net revenue, 17% more than in 2020. 

How did the Nasdaq Composite Index perform?

The Nasdaq has performed very well over the last decade, being up over 490% since 2012. On Nov. 19, 2021, the Nasdaq hit its all-time high of 16,507.44. 

Nasdaq Trading Hours

Traders and investors can trade stocks and other financial assets on the Nasdaq exchange during three market sessions called the premarket session (7:00 a.m. to 9:30 a.m.), the normal trading session (9:30 to 4:00 p.m.), and the postmarket session (4:00 p.m. to 8:00 p.m.). On average, the Nasdaq is open 253 days a year.

Nasdaq Market Tiers

The Nasdaq has three market tiers: the Capital Market (NASDAQ-CM small cap), the Global Market (NASDAQ-GM mid cap), and the Global Select Market (NASDAQ-GS large cap). Smaller companies are listed on the NASDAQ-CM, whilst large international corporations are listed on the NASDAQ-GS. 

Disclaimer

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