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Created in 1971, the Nasdaq was the world's first electronic stock market and is now the largest U.S. electronic stock exchange. With approximately 3,300 companies, it lists more companies and, on average, trades more shares per day than any other U.S. market. It is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology. Stocks traded are usually the smaller, more volatile corporations and include many startup companies. Although stocks trading here are must meet certain minimum requirements, those requirements for size, profitability etc. and less rigid than the NYSE. |
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The initials stand for National Association of Security Dealers Automated Quotations. It is a computer operated system owned by the NASD that provides dealers with price quotations for stocks and securities traded through the NASDAQ. On July 17, 1995 the NASDAQ stock index closed above the 1,000 mark for the first time.
Indices of The Nasdaq Stock Market:
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Security Class
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American Depositary Receipts (ADRs)
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Common
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Limited Partnership Interests
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Ordinary Shares
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Real Estate Investment Trusts (REITs)
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Shares of Beneficial Interest (SBIs)
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Tracking Stocks
The following issue types are not eligible for inclusion in the indices: closed-end funds, convertible debentures, exchange traded funds, preferred stocks, rights, warrants, units and other derivative securities.
The QQQQ Tracker
Most of the companies listed on Nasdaq are smaller or less established than most of those on the NYSE and AMEX. Nasdaq has become known as the home of new technology companies, particularly computer and computer-related businesses.
Trading on Nasdaq is initiated by stockbrokers acting on behalf of their clients. These brokers place orders with certain Nasdaq brokers, called market makers, who concentrate on trading specific stocks. The broker and the market maker negotiate to reach a price for the stock.
Unlike other stock exchanges, Nasdaq has no central location where trading takes place. Instead, its market makers are located all over the country and make trades by telephone and via the Internet.
As brokers and market makers trade stocks directly instead of on the floor of a stock exchange, Nasdaq is called an OTC (over-the-counter) market. The term over-the-counter refers to the direct nature of the trading, as in a store where goods are handed over a counter.
NASDAQ 100 Index Tracking Stock trades on The NASDAQ Stock Market under the ticker symbol 'QQQQ'. It is actually a one investment portfolio that gives you part ownership in the 100 stocks of the NASDAQ 100 Index.
As the NASDAQ 100 Index Tracking Stock trades like stock, you can buy them on margin, sell short or hold your shares for the long term. When you purchase you are investing in the NASDAQ-100 Trust, a unit investment trust that holds shares of the companies in the index.
The NASDAQ 100 Future Index
Both the E-Mini NASDAQ 100 and the NASDAQ 100 contracts are based on the same underlying index, the NASDAQ 100 index.
Both of these are cash settled to the same index value on quarterly expirations. They also both settle daily to the same futures settlement price.
The GLOBEX2 ticker symbol is NQ. The ticker symbol for AON trading is NV. AON stands for All-or-None and relates to the number of contracts being traded. The E-Mini NASDAQ 100 is an IOM product.
There are several differences between the E-Mini NASDAQ 100 contracts and the NASDAQ 100 contracts:
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The E-Mini contract value is only $20 times the index.
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The E-Mini tick size is .50, or $10 per tick. E-Mini futures can trade up until 8:30am (Chicago time), on expiration day.
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E-Mini futures have only two quarterly contracts listed for trading.
An E-Mini futures order for 30 contracts or fewer must be traded on GLOBEX®2. During pit trading hours, orders for 31 or more contracts must be traded via open outcry on an AON basis only.
The current position limit for NASDAQ 100 futures / options is 5,000 futures equivalents net long or short. This limit encompasses all NASDAQ 100 futures, futures options, and E-Mini NASDAQ 100 futures.
NASDAQ Future Index
The NASDAQ Future Index is the first electronic stock market, which uses computers and telecommunications to trade shares rather than a traditional trading floor. It is the fastest growing major stock market in the world with well over 5,000 companies listed.
Market makers compete to buy and sell listed stocks of companies via a worldwide computer network for large and small investors. As mentioned on other pages of this site, it is an OTC market.
The NASDAQ Future Index is not limited to one central trading location. Trading is executed through NASDAQ's computer and telecoms network, which transmits real time quotes and trade data to more than 1 million users in 83 countries.
Without size limitations or geographical boundaries, an open architecture market structure allows a virtually unlimited number of participants to trade in a company's stock.
NASDAQ lists the securities of around 4,000 of the world's leading companies and each year, continues to help hundreds of companies successfully make the transition to public ownership.
Trading on the NASDAQ future index is not limited to any fixed number of participants. This allows a large number of firms with widely differing business models and trading technologies to connect to the NASDAQ Future Index network and compete on an equal basis.
Rather than forcing investors to go through a single financial firm to buy or sell stocks, the NASDAQ Future Index links up a variety of competitors and lets participants choose with whom they are going to trade.