Loading the player...

What is 'Nasdaq'

Nasdaq is a global electronic marketplace for buying and selling securities, as well as the benchmark index for U.S. technology stocks. Nasdaq was created by the National Association of Securities Dealers (NASD) to enable investors to trade securities on a computerized, speedy and transparent system, and commenced operations on February 8, 1971. The term “Nasdaq” is also used to refer to the Nasdaq Composite, an index of more than 3,000 stocks listed on the Nasdaq exchange that includes the world’s foremost technology and biotech giants such as Apple, Google, Microsoft, Oracle, Amazon, Intel and Amgen.
 

BREAKING DOWN 'Nasdaq'

Nasdaq officially separated from the NASD and began to operate as a national securities exchange in 2006. In 2007, it combined with the Scandinavian exchange group OMX to become the Nasdaq OMX group, which is the largest exchange company globally, powering 1 in 10 of the world’s securities transactions. Headquartered in New York, Nasdaq OMX operates 26 markets – primarily equities, and also including options, fixed income, derivatives and commodities – as well as three clearinghouses and five central securities depositories in the U.S. and Europe. Its cutting-edge trading technology is used by 70 exchanges in 50 countries. It is listed on the Nasdaq under the symbol NDAQ and has been part of the S&P 500 since 2008.
 
The Nasdaq computerized trading system was initially devised as an alternative to the inefficient “specialist” system, which had been the prevalent model for almost a century. The rapid evolution of technology has made the Nasdaq’s electronic trading model the standard for markets worldwide.
 
As a leader in trading technology from the outset, it was only fitting that the world’s technology giants chose to list on the Nasdaq in their early days. As the technology sector grew in prominence in the 1980s and 1990s, the Nasdaq became the most widely followed proxy for this sector. The technology and dot-com boom and bust of the late 1990s is exemplified by the rise and fall of the Nasdaq Composite during this period. The index crossed the 1,000 mark for the first time in July 1995, soared in the following years and peaked at over 4,500 in March 2000, before slumping almost 80% by October 2002 in the subsequent correction.

Recent History of Nasdaq

In February, 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Börse, speculation developed that NASDAQ OMX and Intercontinental Exchange (ICE) could mount a counter-bid of their own for NYSE. At the time, NYSE Euronext’s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion. Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Mercantile Exchange to join in what would probably have to be, if it proceeded, an $11–12 billion counterbid.

The European Association of Securities Dealers Automatic Quotation System (EASDAQ) was founded as a European equivalent to the Nasdaq Stock Market. It was purchased by NASDAQ in 2001 and became NASDAQ Europe. Operations were shut down, however, as a result of the burst of the dot-com bubble. In 2007, NASDAQ Europe was revived as Equiduct, and it is currently operating under Börse Berlin.

On June 18, 2012, Nasdaq OMX became a founding member of the United Nations Sustainable Stock Exchanges initiative on the eve of the United Nations Conference on Sustainable Development. In November 2016, Nasdaq Chief Operating Officer Adena Friedman was promoted to the role of CEO, becoming the first woman to run a major exchange in the U.S. In 2016, Nasdaq earned $272 million in listings-related revenues.

RELATED TERMS
  1. Nasdaq National Market Securities ...

    The NASDAQ National - Nasdaq NM is the market, comprising more ...
  2. FTSE NASDAQ 500 Index

    The FTSE NASDAQ 500 is one of four indexes in the FTSE NASDAQ ...
  3. Intermarket Trading System (ITS)

    An intermarket trading system is an electronic computer system ...
  4. Nasdaq Intermarket

    Nasdaq Intermarket was an electronic marketplace where National ...
  5. Nasdaq Composite Index

    The Nasdaq Composite index is a market-capitalization weighted ...
  6. Bombay Stock Exchange (BSE)

    The Bombay Stock Exchange (BSE) is the first and largest securities ...
Related Articles
  1. Investing

    How Nasdaq Continues To Innovate

    For centuries, a stock market was a physical arena where buyers and sellers traded shares. Then the NASDAQ opened and changed everything.
  2. Investing

    Why Do Companies Choose NASDAQ for Their IPO?

    The NYSE is known for its prestige so why do some companies opt to list on the NASDAQ instead?
  3. Insights

    Nasdaq Goes to Bat for Company Founders

    Jeff Thomas, Nasdaq's head of West Coast operations, outlines why the exchange is making a case for startups.
  4. Insights

    What's The Difference Between The Dow And The Nasdaq?

    The way people throw around the words “Dow” and “Nasdaq” makes them seem synonymous with “the market.” But there are important differences.
  5. Investing

    4 Red Flags For Technology Stocks

    Tech stocks may be poised for more declines, according to technical indicators
  6. Investing

    Top 3 NASDAQ-Listed Stocks for 2016 (AAPL, GILD)

    Learn about the top stocks listed on the NASDAQ for 2016. See how Netflix stock has risen dramatically in 2015 and could grow further.
  7. Investing

    3 ETFs to Take Advantage of the Driverless Car Revolution (CARZ, ARKQ)

    Take a look at some ETFs that investors can utilize to obtain exposure to companies in the forefront of developing driverless cars.
  8. Investing

    Top 3 Biotech ETFs (XBI, IBB)

    Learn about three popular ETFs in the biotechnology sector, how they differ, and which ones may be appropriate for long term investors.
  9. Investing

    Who Owns The Stock Exchanges?

    As M&A heats up among the exchanges, here's how the market currently looks.
  10. Tech

    Crypto: What Are Nasdaq, Winklevoss Twins Up To?

    What lies in store for the Winklevoss brothers' cryptocurrency exchange?
RELATED FAQS
  1. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    Discover some of the primary advantages and disadvantages that exist for companies listed on the Nasdaq exchange rather than ... Read Answer >>
  2. What is the difference between the Dow and the Nasdaq?

    The Dow refers to the Dow Jones Industrial Average (DJIA) index, while the Nasdaq refers to the Nasdaq Composite Index. Read Answer >>
  3. What are all of the securities markets in the U.S.A?

    Learn about the major and somewhat lesser-known U.S. financial securities markets. Read Answer >>
  4. What exactly is being done when shares are bought and sold?

    Most stocks are traded on physical or virtual exchanges. The New York Stock Exchange (NYSE), for example, is a physical exchange ... Read Answer >>
Hot Definitions
  1. Diversification

    Diversification is the strategy of investing in a variety of securities in order to lower the risk involved with putting ...
  2. Intrinsic Value

    Intrinsic value is the perceived or calculated value of a company, including tangible and intangible factors, and may differ ...
  3. Current Assets

    Current assets is a balance sheet item that represents the value of all assets that can reasonably expected to be converted ...
  4. Volatility

    Volatility measures how much the price of a security, derivative, or index fluctuates.
  5. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  6. Cost of Debt

    Cost of debt is the effective rate that a company pays on its current debt as part of its capital structure.
Trading Center