The NASDAQ, short for the National Association of Securities Dealers Automated Quotations, is an American stock exchange based in New York City. It’s one of the largest and most well-known electronic exchanges in the world.
Here are some key points about NASDAQ:
1. Electronic Trading Platform: Unlike traditional stock exchanges, which rely on a physical trading floor, NASDAQ operates entirely electronically. It uses a computerised system to facilitate the buying and selling of securities.
2. Technology and Internet Focus: NASDAQ is known for its emphasis on technology and internet-related companies. Many well-known tech giants like Apple, Amazon, Microsoft, and Google’s parent company, Alphabet, are listed on NASDAQ.
3. High Trading Volume: NASDAQ is known for its high trading volumes, particularly in technology and internet-related stocks. It’s a popular exchange for investors interested in these sectors.
4. Listing Requirements: To be listed on NASDAQ, companies must meet specific financial and corporate governance requirements. This includes having a minimum level of shareholders’ equity and meeting certain standards for trading activity.
5. Market Indices: NASDAQ maintains several market indices, including the NASDAQ Composite Index, which tracks the performance of all the companies listed on the exchange. It also includes more specialised indices like the NASDAQ 100, which focuses on the 100 largest non-financial companies listed on NASDAQ.
6. Global Reach: While NASDAQ is based in the United States, it is an international exchange. Many non-U.S. companies choose to list their shares on NASDAQ to access a global pool of investors.
7. Innovation and Entrepreneurship: NASDAQ has a reputation for supporting and fostering innovation and entrepreneurship. It has been a popular choice for technology startups and emerging growth companies to go public.
8. Competitive Landscape: NASDAQ competes with other major U.S. exchanges like the New York Stock Exchange (NYSE) for listings and trading activity.
9. Volatility: Due to its focus on technology and growth-oriented companies, NASDAQ can experience higher volatility compared to more diversified indices.
NASDAQ plays a significant role in the global financial markets, particularly in the technology sector. It provides a platform for companies to raise capital and for investors to buy and sell shares of those companies.