The Nasdaq Stock Exchange
National Association of Securities Dealers Automated Quotation
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The Nasdaq stock exchange began on February 8, 1971 and was the world’s first electronic stock market. This means that there are no brokers actively trading on the trading floors like it is still today with the 30 Dow Jones listed companies at the New York Stock Exchange, and many other stock exchanges around the world like Frankfurt (DAX), London (FTSE), Amsterdam (AEX), or Sydney (ASX) etc. although they also have electronic stock markets.
But even today, the Nasdaq is still the largest electronic stock market in the United States. It’s a computerized system that facilitates trading and provides price quotations on some 5,000 of the more actively traded over-the-counter stocks. About 4000 common stocks are included in the Nasdaq system.
The Nasdaq trades more shares per day than any other U.S. market. It is home to companies that are leaders across all areas of business including technology, retail, communications, financial services, transportation, media and biotechnology.
The Nasdaq allows multiple market participants to trade through it’s electronic communications networks (ECN) structure, increasing competition. The Small Order Execution System (SOES) is another NASDAQ feature, introduced in 1984, to ensure that in “turbulent” market conditions small market orders are not forgotten but are automatically processed.
On July 17, 1995 the NASDAQ stock index closed above the 1,000 mark for the first time. The index peaked at 5132.52 on March 10, 2000, which signaled the beginning of the end of the dot-com boom.
The term "Nasdaq" used to be capitalized "NASDAQ" as an acronym for National Association of Securities Dealers Automated Quotation. In recent times, the acronym was dropped, and Nasdaq is now used as a proper noun.
The Nasdaq is traditionally home to many high-tech stocks. The big ones are companies like Dell Inc., Cisco Systems, Inc., Sun Microsystems Inc., Advanced Micro Devices, Inc. (AMD) and Apple Computer, Inc. That’s why it’s also said that the Nasdaq is “technology heavy”.
Ricky Schmidt
August 29, 2005
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