Nasdaq is the second-largest exchange in the world by market capitalization; only the New York Stock Exchange is bigger. In July 2014, the market cap for Nasdaq was 8.5 million USD.
The currency used for trading at Nasdaq is the United States Dollar (UDS).
Trading hours and days
- Pre-market session 04:00 – 09:30 (Eastern Time Zone)
- Normal trading session 09:30 – 16:00 (Eastern Time Zone)
- Post-market session 16:00 – 20:00 (Eastern Time Zone)
The exchange is closed on Saturdays and Sundays. It is also closed on U.S. holidays advertised in advance by the exchange. Examples of holidays when the exchange is normally closed are New Years Day, Martin Luther King, Jr. Day, President’s Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas Day. The exchange normally closes early (13:00) on Christmas Eve and on the day after Thanksgiving Day.
Market tiers
NASDAQ has three market tiers:
- Nasdaq Global Select Market (Nasdaq GS large cap)
- Nasdaq Global Market (mid cap)
- Nasdaq Capital Market (small cap)
Indicies
Examples of well-known indices based wholly or partly on Nasdaq:
- The Dow Jones Industrial Average is based on 26 NYSE-listed companies and 4 Nasdaq-listed companies.
- The S&P 500 is based on 500 companies traded on either NYSE or Nasdaq.
- NASDAQ-100 is based on 109 equity securities issued by 100 of the largest non-financial companies listed on Nasdaq.
- NASDAQ Composite is based on the common stocks and similar securities (such as tracking stocks and limited partnership interests) listed on Nasdaq. As of April 2015, this index is based on well over 5,000 companies.
Background
Compared to exchanges such as the New York Stock Exchange, the London Stock Exchange and the Tokyo Stock Exchange, Nasdaq is a very young exchange. NASDAQ, the world’s first electronic stock market, was founded in 1971 by the National Association of Securities Dealers (NASD). The acronym NASDAQ stands for National Association of Securities Dealers Automated Quotations.
In the early days of NASDAQ, it was simply a quotation system and did not provide any electronic trading platform. Eventually, NASDAQ turned into a stock market with automated trading systems, trade reporting and volume reporting.
Until 1987, most of the trading took place over the telephone. After the October 1987 stock market crash, the Small Order Execution System (SOES) was launched.
NASDAQ was the first stock market in the United States to facilitate trading online.