Nasdaq is a groundbreaking global electronic marketplace for buying and selling securities, standing as the first of its kind. Formed as the National Association of Securities Dealers Automated Quotations, it paved the way for fully automated trading systems when it launched in 1971. Today, Nasdaq operates as a separate entity and plays a vital role in the global financial landscape.
Key Highlights
- Global Marketplace: Nasdaq facilitates worldwide online buying and trading of securities, earning the distinction of being the first electronic exchange.
- Wide Reach: It operates 29 markets, one clearinghouse, and five central securities depositories across the U.S. and Europe.
- Tech Focused: Dominated by leading technology companies like Apple and Microsoft, Nasdaq continues to innovate and lead in market exchanges.
Evolution of Nasdaq
Initially created as a subsidiary of the National Association of Securities Dealers (NASD), Nasdaq began operations on February 8, 1971, heralding an era of automated stock trading. Since breaking away from NASD in 2006 and merging with the Scandinavian exchanges group OMX in 2008, it has rebranded to Nasdaq Inc. and now lists more than 5,000 companies.
Market Tiers
Nasdaq comprises three levels:
- Nasdaq Global Select Market
- Nasdaq Global Market
- Nasdaq Capital Market
These tiers house a diverse array of companies, particularly in technology sectors and across global boundaries.
The Nasdaq Composite
Popularly referred to as the Nasdaq, the Nasdaq Composite includes over 2,500 stocks from giants such as Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Meta Platforms (META), Amazon (AMZN), and Tesla (TSLA). Not merely a listing index, the Nasdaq Composite serves as a benchmark for the tech industry and global economic health.
Record Performance
- Record Highs: Closed at 16,057.44 on November 19, 2021
- Market Corrections: Experienced a significant drop over 23% through April 2022
- Current Standing: Closed at 13,787.92 on June 30, 2023
The Trading System
Nasdaq’s computerized trading system emerged as a more efficient alternative to the traditional specialist system. Its rapid adaptability and technological investment make it the blueprint for modern stock exchanges globally.
Major Indices
- Nasdaq 100: Focuses on the largest non-financial Nasdaq-listed companies.
- Nasdaq Composite: Encompasses a wide array of companies reflecting overall market trends.
Nasdaq Historical Footnotes
In a historic move, Adena Friedman became the first woman CEO of a major U.S. exchange in 2016. Recent initiatives like the board diversity disclosure rule underscore Nasdaq’s progressive vision and regulatory innovation.
Financial Performance
Nasdaq explores multifaceted revenue streams:
- Market Services
- Investment Analytics and Intelligence.
- Advanced Market Technology.
- Corporate Services.
For FY2022, revenue reached $6.23 billion with net income at $1.12 billion.
Investing in Nasdaq
Nasdaq offers abundant investment opportunities including stocks, mutual funds, ETFs, futures, and annuities. Apple, trading under AAPL on the Nasdaq, exemplifies one of the many globally recognized firms that investors follow closely.
Conclusion
Nasdaq remains at the forefront of stock exchanges, heavily skewed towards technology firms and notable as an innovation pioneer since 1971. With over 5,000 domestic and international listings, its influence on global finance and economies is substantial. The Nasdaq Composite Index continues to be a key performance indicator within the economy.
Related Terms: Nasdaq 100, Nasdaq Composite, SEC, FINRA, electronic trading.
References
- Nasdaq. “Nasdaq: 50 Years of Market Innovation”.
- Nasdaq. “Nasdaq and OMX to Combine”.
- Nasdaq. “2021 Form 10-K”, Page 6.
- Nasdaq. “Initial Listing Guide.”
- Nasdaq. “Trade Global Markets”.
- Nasdaq. “What Is the Nasdaq Composite, and What Companies Are in It?”
- Nasdaq. “Nasdaq Composite Index (COMP), Market Activity”.
- Nasdaq. “NASDAQ Composite Index (COMP)”.
- Nasdaq. “Nasdaq (NDAQ) Picks President Adena Friedman as New CEO”.
- U.S. Securities and Exchange Commission. “Securities and Exchange Commission, Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Order Approving Proposed Rule Changes,” pp. 1-4.
- Nasdaq. “Nasdaq to Advance Diversity Through New Proposed Listing Requirements”.
- Nasdaq. “NASDAQ REPORTS FOURTH QUARTER AND FULL YEAR 2022 RESULTS; DELIVERS STRONG SOLUTIONS BUSINESSES REVENUE GROWTH IN 2022”.
- Nasdaq. “Quotes For Nasdaq-100 Index”.
- Nasdaq. “Nasdaq-100 Index”.
- Apple. “FAQ”.
