What Does NASDAQ Consist Of?

The NASDAQ is the world's first electronic trading system.

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The Dutch claim-shipping company Verenigde Oostindische Compagnie issued the world’s first stock shares, futures and options at the start of the 17th century, but according to World-Stock-Exchanges.net, the London Stock Market also claims to be the world’s first stock market. Happily, in the U.S., there’s no dispute about the New York Stock Exchange’s place in history, but a new kid on the block — the National Association of Security Dealers Automated Quotations (NASDAQ) — debuted on February 8, 1971. U.S. financial markets haven’t been the same since. As a financial entity, the NASDAQ consists of a lot more than meets the eye.


When NASDAQ opened its doors in 1971, 2,500 over-the-counter stocks were put into play as the new stock exchange established a foothold in U.S. financial markets. Between 1982 and 1986, the NASDAQ divided into national and small-cap markets to differentiate mega-companies from smaller ones. By the 1990s, the NASDAQ had grown to become the New York Stock Exchange’s competitor, surpassing the NYSE in numbers of shares traded in 1994. A 1998 merger with the American Stock Exchange produced the NASDAQ-AMEX Market Group.


The biggest difference between the NASDAQ and its competitors is the exchange’s use of electronics to make trades. As the world’s first electronic stock market, advanced technology allows the NASDAQ to list and trade more shares per day than the NYSE. Further, companies wishing to go public and issue company stock may not meet NYSE qualifications for size and profitability; thus NASDAQ provides an alternative.


The NASDAQ index consists of approximately 3,300 companies. The majority are concentrated in technology, biotechnology, financial services, media, communications, retail and transportation. Stock trades on the NASDAQ tend to be smaller and more volatile. The NASDAQ consists of more start-up companies than the NYSE. As a computer-driven trading system operated by the National Association of Security Dealers, the NASDAQ took the lead in trades when the dot-com boom dominated commerce, peaking at 5132.52 on March 10, 2000. The dramatic rise was followed by an equally dramatic fall after the bubble burst.


The NASDAQ consists of a wealth of information offering traders tools they need to make informed decisions. Common securities on the NASDAQ are categorized within these investment types: security class, American depositary receipts (ADRs), common stocks, limited partnership interests, ordinary shares, real estate investment trusts (REITs), shares of beneficial interest (SBIs) and trading stocks. The NASDAQ information stream does not include closed-end funds, convertible debentures, exchange-traded funds, preferred stocks, rights, warrants, units and other derivative securities.


The NASDAQ consists of a powerful research arm that offers traders a daily recap of activity in concert with business news related to the shares being traded on the exchange. You can also find market analyses of trends, profiles of new companies and government-related financial updates on the NASDAQ plus charts and graphs that reflect activity in real time. Look for lists that detail the most active stocks, the biggest advancers and decliners in addition to the dollar volume associated with these stocks.


The NASDAQ consists of educational tools that help traders learn how the exchange operates. Encapsulated data describes corporate actions and company activity analyses. Use default charts to track stocks trading on the NASDAQ from introduction to current times. Access links that help you identify and calculate earnings information, splits and dates on which these took place. Explore NASDAQ-related definitions and access the listing center that “streamlines the preparation of listing applications and forms.” Whether you want to list your stock on the NASDAQ or your intention is strictly trading, these educational tools can expand your horizons.