NASDAQ

Overview

The NASDAQ (National Association of Securities Dealers Automated Quotations) is an American stock exchange that is recognized as the second-largest exchange in the world by market capitalization, surpassed only by the New York Stock Exchange (NYSE). It is owned by Nasdaq, Inc., which also owns and operates several other stock exchanges globally.

History

The NASDAQ was founded in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). It was the world's first electronic stock market, a novelty in an era when most trading was conducted over the phone. The NASDAQ initially functioned as a quotation system and did not actually facilitate trades. Over time, however, it evolved into a full-fledged stock exchange.

Trading on NASDAQ

Trading on the NASDAQ is conducted electronically using a system of computers, which eliminates the need for physical trading floors. This system is known as the NASDAQ MarketSite, which is located in Times Square, New York City. The MarketSite provides real-time financial information and facilitates the trading of NASDAQ-listed securities.

NASDAQ Indices

The NASDAQ is well-known for its high-tech indices, the most famous of which is the NASDAQ Composite. This index includes all the stocks listed on the NASDAQ exchange and is heavily weighted towards technology companies. Another significant index is the NASDAQ-100, which includes the 100 largest non-financial companies listed on the NASDAQ.

NASDAQ Listing Requirements

To be listed on the NASDAQ, a company must meet specific financial, liquidity, and corporate governance requirements. These requirements vary depending on which of the three market tiers a company wishes to be listed on: the NASDAQ Global Select Market, the NASDAQ Global Market, or the NASDAQ Capital Market.

Criticism and Controversies

Despite its significance in the global financial market, the NASDAQ has faced criticism and controversies over the years. These range from technical glitches that disrupted trading to allegations of facilitating high-frequency trading.