What Is Nasdaq?
It is a global electronic marketplace for the purchase and sale of securities. It was founded in 1995. “National Association of Securities Dealers Automated Quotations” (NASD Automated Quotations) was an abbreviation used to refer to a subsidiary of the National Association of Securities Dealers (NASD), which is now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq was established as a platform for investors to exchange assets in an automated, fast, and transparent manner on a global scale. 1 It began operations on February 8, 1971, and has been in operation ever since.
It is also referred to as the Nasdaq Composite, which is an index of more than 3,000 stocks listed on its exchange that includes some of the world’s most prominent technology and biotech companies, such as Apple and Alphabet (Google).3 The term “Nasdaq” is also used to refer to the New York Stock Exchange (NYSE), which was founded in 1873.
It formally withdrew from the National Association of Securities Dealers (NASD) and began operating as a national securities exchange in 2006. With the combination of Nasdaq with the Scandinavian exchange organisation OMX in 2007, it was transformed into the Nasdaq OMX Group, which is the world’s largest exchange corporation, accounting for one in every ten of all worldwide securities transactions.
In addition to its 25 markets in the United States and Europe, Nasdaq OMX also manages one clearinghouse and five central securities depositories. Its primary markets are equities, but it also operates options, fixed income, derivatives, and commodities markets as well as one clearinghouse and five central securities depositories. 5 A total of 90 exchanges in 50 countries make use of its cutting-edge trading technologies. In 2008, it became a member of the S & P 500 index after being listed on the Nasdaq under the ticker NDAQ.
The Nasdaq Trading Platform
It computerised trading system was first developed as a replacement for the inefficient “specialist” system that had been the dominant paradigm for over a century at the time of its inception. Because of the fast advancement of technology, It’s electronic trading model has become the de facto norm for exchanges throughout the world.
It was only right that the world’s technological titans choose to list on the Nasdaq in its early days, given the fact that it was a pioneer in trading technology from the beginning. Over time, as the technology sector gained in importance in the 1980s and 1990s, the Nasdaq became the most widely watched index representing that industry.
This chart depicts the growth and fall of the Nasdaq Composite Index, which should not be confused with its trading platform. The Nasdaq Composite Index is a barometer for technology and dot-com boom and crash in the late 1990s. As reported by the Corporate Finance Institute, the index reached a milestone of 1,000 points for the first time in July 1995, then skyrocketed in the following years, reaching a peak of more than 5,000 points in March 2000. After that, it plummeted by about 80% by October 2002, as part of the ensuing correction.
The index declined to 3,227 in April 2000 and to a low of 1,108.49 in October 2002, when it was at its lowest point. Following the crash, the index made a slow but steady recovery until the global financial crisis struck in 2007/2008.
Recent History of Nasdaq
It was established as a European counterpart to the Nasdaq Stock Market, the European Association of Securities Dealers Automatic Quotation System (EASDAQ). As part of the acquisition by NASDAQ in 2001, it became known as NASDAQ Europe. 7 However, operations were suspended, and in 2007, NASDAQ Europe was relaunched as Equiduct, and it is now part of the Borse Berlin exchange. 8
On June 18, 2012, on the eve of the United Nations Conference on Sustainable Development, Nasdaq OMX became a founding member of the United Nations Sustainable Stock Exchanges programme.
When its Chief Operating Officer Adena Friedman was appointed to the position of CEO in November 2016, she became the first woman to hold the position of CEO of a major stock exchange in the United States.
Nasdaq Futures – Live Index. Among its clients are financial institutions, brokers, institutional investors, and companies. Nasdaq derives its money from these sources. The majority of Nasdaq’s revenue comes from fees levied for the following services:
- Market services, which allows investors access to various markets
- Investment intelligence, which is access to data, indices, and investments analytics for financial institutions, brokers, and asset managers
- Market technology, which includes trading and settlement platforms as well as anti-financial crime technology solutions
- Corporate services, such as listing fees and investment relations services