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The Nasdaq Stock Market () is an American
stock exchange A stock exchange, securities exchange, or bourse is an exchange Exchange may refer to: Places United States * Exchange, Indiana Exchange is an Unincorporated area, unincorporated community in Green Township, Morgan County, Indiana, Green To ...
based in
New York City New York, often called New York City to distinguish it from New York State New York is a state State may refer to: Arts, entertainment, and media Literature * ''State Magazine'', a monthly magazine published by the U.S. Department of ...

New York City
. It is ranked second on the
list of stock exchanges This is a list of major stock exchanges. Those futures exchanges that also offer trading in security (finance), securities besides trading in futures contracts are listed both here and in the list of futures exchanges. There are sixteen stock ex ...
by
market capitalization Market capitalization, commonly called market cap, is the market value of a publicly traded company A public company, publicly traded company, publicly held company, publicly listed company, or public limited company A public limited compan ...
of shares traded, behind the
New York Stock Exchange The New York Stock Exchange (NYSE, nicknamed "The Big Board") is an American stock exchange A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy an ...

New York Stock Exchange
. The exchange platform is owned by Nasdaq, Inc., which also owns the
Nasdaq Nordic Nasdaq Nordic is the common name for the subsidiaries of Nasdaq, Inc. that provide financial services Financial services are the economic services provided by the finance Finance is the study of financial institutions, financial market ...
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 In linguistics Linguistics is the scientific study of language A language is a structured system of communication used by humans, including speech (spoken language), gestures (Signed language, sign langu ...
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 The Financial Industry Regulatory Authority (FINRA) is a private American corporation that acts as a self-regulatory organization A self-regulatory organization (SRO) is an organization that exercises some degree of regulatory authority over an in ...
(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 medicine Medicine is the Art (skill), art, science, and Praxis (process) , practice of caring for a patient and managing the diagnosis, prognosis, Preventive medicine, prevention, therapy, treatment or Palliat ...
(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 S&P Global Ratings (previously Standard & Poor's and informally known as S&P) is an American credit rating agency A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor's abilit ...

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 A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy and sell security (finance), securities, such ...
to form the first intercontinental linkage of
capital market 200px, The trading floor of the New York Stock Exchange, one of the largest secondary capital markets in the world. Most of the trades on the New York Stock Exchange are executed electronically, but its hybrid structure allows some trading to be ...
s. 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, also known as the dot-com boom, the tech bubble, and the Internet bubble, was a stock market bubble Stock (also capital stock) is all of the Share (finance), shares into which ownership of a corporation is divided.Longm ...
. Its main index is the , which has been published since its inception. The QQQ
exchange-traded fund An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the da ...
tracks the large-cap
NASDAQ-100 The Nasdaq-100 (^NDX) is a stock market index In , a stock index, or stock market index, is an that measures a , or a subset of the stock market, that helps s compare current s with past prices to calculate market performance. Two of the pr ...

NASDAQ-100
index, which was introduced in 1985 alongside the
NASDAQ Financial-100 The NASDAQ Financial-100 is a specialty index operated by NASDAQ that follows stocks in the financial services index. It was created in 1985 as the sister index to the more widely followed NASDAQ-100. As designed by NASDAQ, this index follows compa ...
Index, which tracks the largest 100 companies in terms of market capitalization.


2000–present

On March 10, 2000, the
stock market index In finance, a stock index, or stock market index, is an Index (economics), 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 performa ...
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, publicly traded company, publicly held company, publicly listed company, or public limited company is a company whose ownership is organized via shares of share capital, stock which are intended to be freely traded on a stock ...
via an
initial public offering An initial public offering (IPO) or stock launch is a in which shares of a company are sold to s and usually also retail (individual) investors. An IPO is typically by one or more , who also arrange for the shares to be listed on one or more s ...
. 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 The U.S. Securities and Exchange Commission (SEC) is a large independent agencies of the United States government, independent agency of the United States federal government that was created following the Great Depression, stock market crash in ...

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 function of a market maker is t ...
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 NYSE Euronext, Inc. was a Euro-American Multinational corporation, multinational financial services corporation that operated multiple Stock exchange, securities exchanges, including the New York Stock Exchange, Euronext and NYSE Arca (formerly k ...
with
Deutsche Börse Deutsche Börse AG () or the Deutsche Börse Group, is a German company offering marketplace organizing for the trading of shares In financial markets A financial market is a market in which people trade financial securities and deriva ...
, speculation developed that NASDAQ OMX and
Intercontinental Exchange The Intercontinental Exchange (ICE) is an American Fortune 500 company formed in 2000 that operates global exchanges, clearing houses and provides mortgage technology, data and listing services. The company owns exchanges for financial Fin ...
(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 Derivative may refer to: In mathematics and economics *Brzozowski derivative in the theory of formal languages *Derivative in calculus, a quantity indicating how a function changes when the values of its inputs change. *Formal derivative, an opera ...
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 The Chicago Mercantile Exchange (CME) (often called "the Chicago Merc", or "the Merc") is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an a ...

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 Instinet is an institutional, agency-model broker A broker is a person or firm who arranges transactions between a Purchasing, buyer and a sales, seller for a commission (remuneration), commission when the deal is executed. A broker who also act ...
for $1.9 billion, retaining the
Inet Inet was an electronic trading platform In finance, an electronic trading platform also known as an online trading platform, is a computer software program that can be used to place orders for financial products over a network with a financial int ...
ECN and subsequently selling the agency brokerage business to
Silver Lake Partners Silver Lake is a global private equity firm focused on investments in technology, technology-enabled and related industries. Founded in 1999, the firm is one of the largest technology investors in the world. Its investment holdings have included A ...
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, also known as the dot-com boom, the tech bubble, and the Internet bubble, was a stock market bubble Stock (also capital stock) is all of the Share (finance), shares into which ownership of a corporation is divided.Longm ...
. 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 The United Nations (UN) is an intergovernmental organization that aims to maintain internati ...
on the eve of the
United Nations Conference on Sustainable Development The United Nations Conference on Sustainable Development (UNCSD), also known as Rio 2012, Rio+20 (), or Earth Summit 2012 was the third international conference on sustainable development aimed at reconciling the economic and environmental goals o ...

United Nations Conference on Sustainable Development
(Rio+20). In November 2016,
chief operating officer A chief operating officer (COO), also called a chief operations officer, 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 {{unreferenced, date=May 200 ...
Adena Friedman Adena T. Friedman (born 1969) is an American businesswoman. She currently serves as the President and CEO of Nasdaq. She was formerly the managing director and CFO of The Carlyle Group. Initially joining Nasdaq in 1993, she returned to Nasdaq from ...

Adena Friedman
was promoted to
chief executive officer A chief executive officer (CEO), chief administrator officer, or just chief executive (CE), is one of a number of Corporate Executive, corporate executives in charge of managing an organization especially an independent Legal person, legal entity ...
, 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 A stock exchange, securities exchange, or bourse is an Exchange (organized market), exchange where stockbrokers and stock trader, traders can buy an ...

New York Stock Exchange
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 Executive Order 13959 is a U.S. Presidential Executive Order In the United States, an executive order is a directive Directive may refer to: * Directive (European Union), a legislative act of the European Union * Directive (programming), ...
.


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 function of a market maker is t ...
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 function of a market maker is t ...
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 A time zone is an area that observes a uniform standard time for legal, Commerce, commercial and social purposes. Time zones tend to follow the boundaries between Country, countries and their Ad ...
are: 7:00 a.m. to 9:30 a.m.: extended-hours trading 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 day In business, the trading day or regular trading hours (RTH) is the time span that a stock exchange is open, as opposed to Electronic trading hours, electronic or extended trading hours (ETH). For example, the New York Stock Exchange is, as of 2020, ...
s 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) 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, commonly called market cap, is the market value of a publicly traded company's shares outstanding, outstanding shares. Market capitalization is equal to the share price multiplied by the number of shares outstanding. Sinc ...
) is a market capitalization-weighted index made up of US-based and international stocks that represent the Global Select Market Composite. 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 *
Economy of New York City The economy of New York City encompasses the largest municipal and regional economy in the United States The United States of America (USA), commonly known as the United States (U.S. or US), or America, is a country Contiguous United Sta ...
*
List of stock exchange mergers in the AmericasThis is a list of major stock exchange mergers and acquisitions in the Americas. It also features the name of any resultant stock exchanges from mergers or acquisitions. According to Robert E. Wright of ''BloombergBloomberg may refer to: People * ...
*
List of stock exchanges in the Americas This is a list of active stock exchanges in the Americas. Stock exchanges in Latin America * pt, América Latina, link=no , image = Latin America (orthographic projection).svg , area = , population = ( est.) , density = , religions ...
* NASDAQ futures *
United States corporate law United States corporate law regulates the corporate governance, governance, corporate finance, finance and corporate capitalism, power of Corporation, corporations in US law. Every List of states and territories of the United States, state and terr ...


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