The NASDAQ is the second largest stock exchange in the US, with many large technology companies listed. It operates electronically and offers the NASDAQ 100 index. Stocks traded on NASDAQ have a four-letter abbreviation.
The NASDAQ is an American stock exchange headquartered in New York City. NASDAQ, which was originally an acronym for National Association of Securities Dealers Automated Quotations, is the second largest stock exchange in the United States, in terms of the value of its securities, behind only the New York Stock Exchange (NYSE). Many of the world’s largest technology companies are listed on NASDAQ, including Amazon, Apple, Cisco, eBay, Google, Intel, Microsoft, and Sun.
The NASDAQ was born in 1971, and the stock exchange now contains about 3,200 publicly traded companies. A stock exchange is a place where people can buy and sell shares of a public company. The stock exchange helps the buyer and seller set a price by charging a fee for its service.
The NASDAQ is different from the NYSE, because its stock trading is, and always has been, done completely electronically. For nearly its first two decades, stock trading on the NASDAQ occurred via a computer bulletin board system and by telephone. Now, however, trading on the NASDAQ occurs using automated trading systems, with full reports on trades and daily trading volumes.
While the NYSE has the well-known Dow Jones Industrial Average as its primary index, the NASDAQ offers the NASDAQ 100 as its primary index. This consists of 100 of the largest companies by market value listed on the NASDAQ. Companies in the NASDAQ 100 include companies from a variety of market sectors, as well as financial services companies, which are included in their own index. Each year, companies can be added and removed from the NASDAQ 100, based on their market value ranking. An index is a collection of stocks, ranging from a few dozen companies to several thousand, that are combined to provide a snapshot of the performance of the entire market.
Each publicly traded company can only allow its shares to be traded on one stock exchange. When a company initially begins offering shares to the public, it selects a stock exchange to trade on. Occasionally, a company will move from one stock exchange to another.
When you view stock performance on a stock ticker, you’ll see stocks traded on the NASDAQ using a four-letter abbreviation, with only a few exceptions. Stocks listed on the New York Stock Exchange use a three, two, or one letter abbreviation. When you watch stock performance on a financial news TV channel or in a newspaper, you’ll see the NASDAQ and NYSE stocks listed side by side.
The NASDAQ standard buying and selling session is from 9:30 am to 4 pm Eastern Time, most business days, excluding certain holidays. Pre- and post-market trading sessions allow you to buy and sell outside of standard market hours.
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