NASDAQ
The History of the NASDAQ Stock Market
The NASDAQ Stock Market was created by the NASD - National Association of Securities Dealers - in 1971. The acronym "NASDAQ" originally stood for National Association of Securities Dealers Automated Quotations and was noted for being the first electronic stock market. At first it was simply a bulletin board on a computer, but that helped decrease the spread between the ask/bid prices for stocks.
In the year 2000, NASD divested itself of the Exchange and the new name was the NASDAQ Stock Market, Inc. This market was the first to automate trading and volume reporting. Now, the NASDAQ OMX, with its Global Market, serves six continents and has expanded to a worldwide organization with over 3500 companies listed. All companies traded on the NASDAQ are included in the NASDAQ Composite. Selected companies are included in the NASDAQ 100.
Types Traded on This Exchange
Stocks and Bonds
Widely known for the emphasis on tech stocks and internet stocks, this Exchange also has listings with financial, consumer, bio-tech, retail, and industrial firms. An elite group of firms are selected and make up the NASDAQ 100. To be included in this group, the company must meet stringent requirements that include being listed on the NASDAQ for a certain time, having a specific volume, and meeting capitalization criteria.
Currencies
A late bloomer in NASDAQ, currencies trading has become more important as world trade has increased. World traders including futures contracts from another country in their portfolio may need to hedge this with a currency contract to be sure the amount of the futures contract is locked in.
Commodities
Commodities traded on the NASDAQ OMX Commodities Europe include power, natural gas, and carbon emissions.
ETFs
Many Exchange traded funds have their beginnings around 2004 or later. They cover most types of securities and commodities. Many operate much like a mutual fund, but are traded like a stock. They can be bought or sold whenever the market is open.
Derivatives
A derivative is essentially a contract between two parties with an underlying asset. The underlying asset may include stocks or bonds, may also include currencies or interest rates and may include market indexes themselves.
Indexes
Indexes may be on indexes themselves or they may reflect the activity of a particular group of stocks, bonds or commodities, or even the broad market. An example of an index is the NASDAQ Composite that can be tracked as ^IXIC. Indexes are usually traded as ETFs.
Premier Stocks Included in the NASDAQ 100
The NASDAQ 100 includes 100 companies that have the highest capitalization within the NASDAQ-listed securities. They can be domestic or international, but cannot be financial securities. The following companies show the diversity of the listings in this index.
1. Amazon.com – AMZN
This stock is trading around $177 and has a three-month average daily volume of 6,973,540. It is primarily an online retailer offering a wide range of products.
2. Apple Inc. – AAPL
Trading at around $403 with a three-month average daily volume of 17,074,200, this stock is widely recognized as a mobile and media communications leader and offers both equipment, sales and services.
3. Microsoft Corporation – MSFT
Microsoft trades around $26 and has a three-month average daily trading volume of 53,988,500. This corporation develops and licenses online software used throughout the PC world.
4. PACCAR Inc. – PCAR
This corporation's stock trades around $38 and has a three-month average daily volume of 3,175,940. They design, manufacture and distribute trucks for worldwide use. Their trucks include Peterbilt, Kenworth and DAF.
5. Starbucks Corporation – SBUX
This corporation has around 11,000 stores nationwide and slightly over 6,000 more internationally. It trades around $16 with a three-month average daily volume of 6,553,570. They purchase and roast coffee that retails in many outlets worldwide.
Worldwide Influence on Finances
By its very transparency in the markets, the NASDAQ is an influence on finances worldwide. Its online access, its plug-and-play, its involvement in world securities and commodities and its ability to influence investments on a wide scope makes it one of the financial heavyweights in the world of investing.
New York's Financial Industry
The financial industry in New York is focused in the heart of Manhattan, specifically the corner of Wall Street and Broadstreet, just off William Street. New York's Financial District, also referred to as FiDi, is home to the city's major financial institutions.