NASDAQ

What is NASDAQ?

NASDAQ (National Association of Securities Dealers Automated Quotations) is the second largest stock exchange in the world by market capitalization. Founded in 1971, it was the first fully electronic stock market and still has no physical trading floor.

How it works

• Fully electronic: all orders are matched by computers with no human intermediary on a trading floor
• Uses multiple competing market makers per stock rather than a single specialist like the NYSE
• Market makers compete to offer the best bid and ask prices, which generally results in tight spreads for actively traded stocks
• Known for fast execution and high trading volume

NASDAQ listing tiers

• Global Select Market: the highest tier with the strictest financial and governance requirements. Most large-cap NASDAQ stocks are here.
• Global Market: mid-tier requirements for established companies
• Capital Market: the entry-level tier with lower requirements, designed for smaller companies. Minimum $4 share price, $15 million market cap, and 300 shareholders.

What trades on NASDAQ

NASDAQ lists roughly 3,300 companies and is known as the home of technology and growth stocks. Microsoft, Apple, Amazon, Google (Alphabet), Tesla, Meta, and NVIDIA all trade on NASDAQ. The NASDAQ Composite and NASDAQ-100 indices track the performance of NASDAQ-listed companies and are among the most watched benchmarks in the world.

The NASDAQ-100 index tracks the 100 largest non-financial companies listed on NASDAQ. The ETF that tracks it, QQQ, is one of the most heavily traded securities in the world.