Nasdaq

Overview

The Nasdaq Stock Market, commonly known as Nasdaq, is an American stock exchange based in New York City. It is the world’s second-largest stock exchange by market capitalization, trailing only the New York Stock Exchange. Nasdaq was founded in 1971 and was the world’s first electronic stock market.

Key Concepts

Nasdaq is renowned for its listing of technology companies. It operates as a dealer’s market, where market makers quote prices for securities and stand ready to buy or sell them. This contrasts with an auction market like the NYSE.

Deep Dive

Nasdaq’s electronic trading system revolutionized the stock market by allowing for faster and more efficient transactions. It introduced the NASDAQ Composite index, a market-capitalization-weighted index of common stocks listed on the Nasdaq exchange.

Applications

Many of the world’s leading technology firms, including Apple, Microsoft, Amazon, and Google, are listed on Nasdaq. Its listing requirements are often seen as more accessible to growth-oriented companies, particularly in the tech sector.

Challenges & Misconceptions

A common misconception is that Nasdaq is only for tech stocks. While it has a high concentration of tech companies, it lists businesses from various sectors. Another challenge is the volatility sometimes associated with its listed companies.

FAQs

What does Nasdaq stand for?

Nasdaq stands for the National Association of Securities Dealers Automated Quotations.

Is Nasdaq a public company?

Yes, Nasdaq is a publicly traded company. Its parent company is Nasdaq, Inc., and it is listed on its own exchange.

How does Nasdaq differ from the NYSE?

Nasdaq is primarily an electronic dealer’s market, while the NYSE is largely an auction market. Nasdaq also has a reputation for listing more technology and growth stocks.