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The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in
New York City New York, often called New York City or NYC, is the List of United States cities by population, most populous city in the United States. With a 2020 population of 8,804,190 distributed over , New York City is also the L ...
. It is the most active stock trading venue in the US by volume, and ranked second on the list of stock exchanges by market capitalization of shares traded, behind the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
. The exchange platform is owned by
Nasdaq, Inc. Nasdaq, Inc. is an American multinational financial services corporation that owns and operates three stock exchanges in the United States: the namesake Nasdaq stock exchange, the Philadelphia Stock Exchange, and the Boston Stock Exchange, a ...
, which also owns the Nasdaq Nordic stock market network and several U.S.-based stock and options exchanges.


History


1971–2000

"Nasdaq" was initially an
acronym An acronym is a word or name formed from the initial components of a longer name or phrase. Acronyms are usually formed from the initial letters of words, as in ''NATO'' (''North Atlantic Treaty Organization''), but sometimes use syllables, as ...
for the National Association of Securities Dealers Automated Quotations. It was founded in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). On February 8, 1971, the Nasdaq stock market began operations as the world's first electronic stock market. At first, it was merely a "quotation system" and did not provide a way to perform electronic trades. The NASDAQ Stock Market eventually assumed the majority of major trades that had been executed by the
over-the-counter Over-the-counter (OTC) drugs are medicines sold directly to a consumer without a requirement for a prescription from a healthcare professional, as opposed to prescription drugs, which may be supplied only to consumers possessing a valid prescr ...
(OTC) system of trading, but there are still many securities traded in this fashion. As late as 1987, the Nasdaq exchange was still commonly referred to as "OTC" in media reports and also in the monthly Stock Guides (stock guides and procedures) issued by Standard & Poor's Corporation. Over the years, it became more of a stock market by adding trade and volume reporting and automated trading systems. In 1981, Nasdaq traded 37% of the U.S. securities markets' total of 21 billion shares. By 1991, Nasdaq's share had grown to 46%. In 1992, the Nasdaq Stock Market joined with the
London Stock Exchange London Stock Exchange (LSE) is a stock exchange in the City of London, England, United Kingdom. , the total market value of all companies trading on LSE was £3.9 trillion. Its current premises are situated in Paternoster Square close to St Pau ...
to form the first intercontinental linkage of capital markets. In 1998, it became the first stock market in the United States to trade online, using the slogan "the stock market for the next hundred years". The Nasdaq Stock Market attracted many companies during the
dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Comp ...
. Its main index is the NASDAQ Composite, which has been published since its inception. The QQQ exchange-traded fund tracks the large-cap NASDAQ-100 index, which was introduced in 1985 alongside the NASDAQ Financial-100 Index, which tracks the largest 100 companies in terms of market capitalization.


2000–present

On March 10, 2000, the NASDAQ Composite
stock market index In finance, a stock index, or stock market index, is an index that measures a stock market, or a subset of the stock market, that helps investors compare current stock price levels with past prices to calculate market performance. Two of th ...
peaked at 5,132.52, but fell to 3,227 by April 17, and, in the following 30 months, fell 78% from its peak. In a series of sales in 2000 and 2001, FINRA sold its stake in the Nasdaq. On July 2, 2002, Nasdaq Inc. became a
public company A public company is a company whose ownership is organized via shares of stock which are intended to be freely traded on a stock exchange or in over-the-counter markets. A public (publicly traded) company can be listed on a stock exchange ( ...
via an
initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investme ...
. In 2006, the status of the Nasdaq Stock Market was changed from a stock market to a licensed national securities exchange. In 2007, it merged with OMX, a leading exchange operator in the Nordic countries, expanded its global footprint, and changed its name to the NASDAQ OMX Group. To qualify for listing on the exchange, a company must be registered with the United States Securities and Exchange Commission (SEC), must have at least three
market maker A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the '' bid–ask spread'', or ''turn.'' The benefit to the firm is that ...
s (financial firms that act as brokers or dealers for specific securities) and must meet minimum requirements for assets, capital, public shares, and shareholders. In February 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Börse, speculation developed that NASDAQ OMX and
Intercontinental Exchange Intercontinental Exchange, Inc. (ICE) is an American company formed in 2000 that operates global financial exchanges and clearing houses and provides mortgage technology, data and listing services. Listed on the Fortune 500, S&P 500, and Russ ...
(ICE) could mount a counter-bid of their own for NYSE. NASDAQ OMX could be looking to acquire the American exchange's cash equities business, ICE the derivatives business. 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. In December 2005, NASDAQ acquired Instinet for $1.9 billion, retaining the Inet ECN and subsequently selling the agency brokerage business to Silver Lake Partners and Instinet management. 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. In 2003, operations were shut down as a result of the burst of the
dot-com bubble The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet. Between 1995 and its peak in March 2000, the Nasdaq Comp ...
. In 2007, NASDAQ Europe was revived first as Equiduct and was acquired by Börse Berlin later that year. On June 18, 2012, Nasdaq OMX became a founding member of the United Nations
Sustainable Stock Exchanges Initiative The Sustainable Stock Exchanges (SSE) initiative promoting corporate investment in sustainable development. It is a project of the United Nations (UN) co-organized by the United Nations Conference on Trade and Development ( UNCTAD), the United ...
on the eve of the United Nations Conference on Sustainable Development (Rio+20). In November 2016,
chief operating officer A chief operating officer or chief operations officer, also called a COO, is one of the highest-ranking executive positions in an organization, composing part of the " C-suite". The COO is usually the second-in-command at the firm, especially if ...
Adena Friedman Adena T. Friedman (born Adena Robinson Testa; 1969) is an American businesswoman. She currently serves as the President and CEO of Nasdaq, Inc. She was formerly a managing director and CFO of The Carlyle Group. Initially joining Nasdaq in 1993, ...
was promoted to
chief executive officer A chief executive officer (CEO), also known as a central executive officer (CEO), chief administrator officer (CAO) or just chief executive (CE), is one of a number of corporate executives charged with the management of an organization especiall ...
, becoming the first woman to run a major exchange in the U.S. In 2016, Nasdaq earned $272 million in listings-related revenues. In October 2018, the SEC ruled that the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange in the Financial District of Lower Manhattan in New York City. It is by far the world's largest stock exchange by market capitalization of its liste ...
and Nasdaq did not justify the continued price increases when selling market data. In December 2020, NASDAQ announced that it would strip its indexes of four Chinese companies in response to Executive Order 13959.


Contract Specifications

Nasdaq 100 futures are traded on the CME (Chicago Merchantile Exchange) while its derivatives, E-Mini Nasdaq 100 and Micro E-Mini Nasdaq 100 futures are traded on the EMiniCME. Below are the contract specifications for the nasdaq 100 and derivatives.


Quote availability

Nasdaq quotes are available at three levels: * Level 1 shows the highest bid and lowest ask—inside quote. * Level 2 shows all public quotes of
market maker A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the '' bid–ask spread'', or ''turn.'' The benefit to the firm is that ...
s together with information of market dealers wishing to buy or sell stock and recently executed orders. * Level 3 is used by the
market maker A market maker or liquidity provider is a company or an individual that quotes both a buy and a sell price in a tradable asset held in inventory, hoping to make a profit on the '' bid–ask spread'', or ''turn.'' The benefit to the firm is that ...
s and allows them to enter their quotes and execute orders.


Trading schedule

The Nasdaq Stock Market sessions, with times in the
Eastern Time Zone The Eastern Time Zone (ET) is a time zone encompassing part or all of 23 states in the eastern part of the United States, parts of eastern Canada, the state of Quintana Roo in Mexico, Panama, Colombia, mainland Ecuador, Peru, and a smal ...
are: 7:00 a.m. to 9:30 a.m.:
extended-hours trading Extended-hours trading (or electronic trading hours, ETH) is stock trading that happens either before or after the trading day of a stock exchange, i.e., pre-market trading or after-hours trading. After-hours trading is the name for buying and ...
session (premarket) 9:30 a.m. to 4:00 p.m.: normal trading session 4:00 p.m. to 8:00 p.m.: extended-hours trading session (postmarket) The Nasdaq Stock Market averages about 253 trading days per year.


Market tiers

The Nasdaq Stock Market has three different market tiers: * Capital Market (NASDAQ-CM small cap) is an equity market for companies that have relatively small levels of market capitalization. Listing requirements for such "small cap" companies are less stringent than for other Nasdaq markets that list larger companies with significantly higher market capitalization. * Global Market (NASDAQ-GM
mid cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by t ...
) is made up of stocks that represent the Nasdaq Global Market. The Global Market consists of 1,450 stocks that meet Nasdaq's strict financial and liquidity requirements, and corporate governance standards. The Global Market is less exclusive than the Global Select Market. * Global Select Market (NASDAQ-GS
large cap Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...
) is a market capitalization-weighted index made up of US-based and international stocks that represent the
NASDAQ Global Select Market Composite The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
(NQGS). The Global Select Market consists of 1,200 stocks that meet Nasdaq's strict financial and liquidity requirements and corporate governance standards. The Global Select Market is more exclusive than the Global Market. Every October, the Nasdaq Listing Qualifications Department reviews the Global Market Composite to determine if any of its stocks have become eligible for listing on the Global Select Market.


See also

* ACT (NASDAQ) * Advanced Computerized Execution System *
Directors Desk Directors Desk is a paperless boardroom for information sharing. It was founded in 2003 by a team of corporate governance and technology specialists and was acquired by the NASDAQ OMX Group in 2007. Its solutions are used by more than 1,000 director ...
* Economy of New York City * List of stock exchange mergers in the Americas * List of stock exchanges in the Americas * NASDAQ futures * Supermontage (SM) integrated trading system *
United States corporate law United States corporate law regulates the governance, finance and power of corporations in US law. Every state and territory has its own basic corporate code, while federal law creates minimum standards for trade in company shares and governanc ...


References


External links

* {{Authority control 1971 establishments in New York City American companies established in 1971 Companies based in New York City Economy of New York City Electronic trading platforms Financial services companies based in New York City Financial services companies established in 1971 Private equity portfolio companies Stock exchanges in the United States