Nasdaq

Nasdaq Stock Market
	File:Nasdaq Logo.svg Nasdaq logo
Company type	Public company
Industry	Stock exchange
Predecessor	National Association of Securities Dealers Automated Quotations
Founded	February 8, 1971; 55 years ago in New York City, United States
Headquarters	New York City, United States
Area served	Global
Key people	Adena Friedman (CEO)
Products	Stock trading platform, market indices (NASDAQ Composite, NASDAQ-100)
Owner	Nasdaq, Inc.
Parent	Nasdaq, Inc.

The Nasdaq Stock Market (; originally the National Association of Securities Dealers Automated Quotations) stands as a premier American stock exchange with its headquarters located in New York City. It holds the distinction of being the busiest stock trading platform in the United States by trading volume and ranks second worldwide in terms of market capitalization of shares traded, trailing only the New York Stock Exchange. The exchange is operated by Nasdaq, Inc. (traded under the ticker symbol NDAQ), which also manages the Nasdaq Nordic market along with various other U.S.-based stock and options exchanges.

While Nasdaq is primarily recognized for its emphasis on technology sector listings, it also features companies spanning healthcare, financial services, media, retail, hospitality, and food industries. Its roster includes both domestic and international corporations, with a notable presence from firms based in China and Israel, underscoring its extensive global reach and influence.

Founding and Origins

Established in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA), Nasdaq, Inc. introduced a revolutionary electronic quotation system. The acronym "NASDAQ" initially represented National Association of Securities Dealers Automated Quotations. On February 8, 1971, it debuted as the first fully electronic stock market worldwide, functioning initially as a quotation service rather than a complete electronic trading venue. Early key listings included companies such as Intel Corporation, Comcast, and Applied Materials, marking its early involvement in pivotal technology and media sectors.

Market Growth

After its inception, Nasdaq attracted numerous issuers from the over-the-counter (OTC) market and gradually transformed into a comprehensive stock exchange equipped with trade reporting and automated trading capabilities. By 1981, Nasdaq accounted for 37% of U.S. securities trading volume, which expanded to 46% by 1991, demonstrating substantial growth in market share. In 1992, Nasdaq established the first intercontinental connection with the London Stock Exchange, broadening its international scope and operational influence.

In 1996, regulatory investigations revealed that Nasdaq market makers were implicated in price-fixing practices by avoiding "odd-eighths" quotes to artificially widen bid-ask spreads. These findings prompted regulatory reforms aimed at enhancing transparency and competition within Nasdaq’s order execution processes.

Online Trading

In 1998, Nasdaq became the pioneer among U.S. stock exchanges to facilitate online trading, promoting itself as "the stock market for the next hundred years." This innovation attracted a surge of companies during the dot-com boom. Since its inception, the NASDAQ Composite index has been published as a key market indicator. Additionally, the QQQ exchange-traded fund tracks the large-cap NASDAQ-100 index, which was launched in 1985 alongside the NASDAQ Financial-100 Index that monitors the top 100 companies by market capitalization.

2000–2020

On March 10, 2000, the NASDAQ Composite reached an all-time high of 5,132.52 points but declined sharply to 3,227 by mid-April. Over the subsequent 30 months following the collapse of the dot-com bubble, it experienced a dramatic decrease of approximately 78%.

Public Offering and Market Evolution

Between 2000 and 2001, FINRA sold off its holdings in NASDAQ. Subsequently, on July 2, 2002, Nasdaq, Inc. conducted an initial public offering, listing its shares under the ticker symbol NDAQ. By 2006, NASDAQ Stock Market had achieved status as a licensed national securities exchange. The 2007 merger with OMX, an exchange operator based in the Nordic region, significantly broadened NASDAQ's international footprint and resulted in the rebranding to NASDAQ OMX Group.

Companies aiming to list on NASDAQ are required to register with the SEC, maintain at least three market makers, and satisfy minimum thresholds related to assets, capital, publicly held shares, and shareholder count.

In February 2011, following the announcement of NYSE Euronext’s planned merger with Deutsche Börse, speculation emerged that NASDAQ OMX and Intercontinental Exchange (ICE) might submit competing bids for NYSE Euronext’s assets—NASDAQ focusing on cash equities while ICE targeted derivatives. At that time, NYSE Euronext’s valuation stood at $9.75 billion; NASDAQ’s at $5.78 billion; and ICE’s at $9.45 billion. Reports suggested NASDAQ could collaborate with ICE or the Chicago Mercantile Exchange to mount a counteroffer in the range of $11 to $12 billion.

Strategic Acquisitions

In December 2005, NASDAQ completed the purchase of Instinet for $1.9 billion, keeping control of the Inet electronic communication network while divesting the agency brokerage unit to Silver Lake Partners and Instinet’s management team.

NASDAQ acquired the European Association of Securities Dealers Automatic Quotation System (EASDAQ)—established as a European equivalent to NASDAQ—in 2001 and rebranded it as NASDAQ Europe. However, operations were discontinued in 2003 following the collapse of the dot-com bubble. The platform was revived in 2007 under the name Equiduct before eventually being acquired by Börse Berlin.

On November 7, 2007, NASDAQ further expanded its market presence by acquiring the Philadelphia Stock Exchange, recognized as the oldest stock exchange in the United States, thereby strengthening its global reach and industry influence.

Sustainability Initiatives and Leadership Achievements

On June 18, 2012, NASDAQ OMX became a founding participant in the United Nations Sustainable Stock Exchanges Initiative prior to the United Nations Conference on Sustainable Development (Rio+20), underscoring its dedication to promoting sustainability within international financial markets.

In November 2016, Adena Friedman, then chief operating officer, was appointed as chief executive officer, becoming the first woman to lead a major U.S. stock exchange—a landmark moment for leadership diversity and strategic direction.

During that same year, Nasdaq reported $272 million in revenue derived from listings-related activities, demonstrating robust growth and a dominant position within the exchange sector.

In October 2018, regulatory authorities intervened when the SEC prohibited both the New York Stock Exchange (NYSE) and Nasdaq from increasing certain fees associated with market data pricing—a notable regulatory obstacle affecting revenue generated from stock market data feeds.

In December 2020, Nasdaq announced plans to exclude shares of four Chinese companies from its maintained indexes in adherence to Executive Order 13959, reflecting its proactive approach toward geopolitical risks influencing its worldwide operations.

2021–Present

In September 2024, the European Commission carried out a surprise inspection at Nasdaq's premises to investigate possible anti-competitive practices.

In March 2025, Nasdaq revealed its intention to introduce round-the-clock trading on its U.S. exchange, operating five days per week, starting in the latter half of 2026. This initiative aims to accommodate increasing international interest in U.S. equities, subject to approval by the U.S. Securities and Exchange Commission.

Contract specifications

Futures based on the Nasdaq 100 index are traded on the CME, whereas contracts such as E-Mini Nasdaq 100 and Micro E-Mini Nasdaq 100 futures are available on the EMiniCME platform. The main contract details are as follows:

Contract Specifications
	Nasdaq 100 (NDA)	E-Mini Nasdaq 100 (NQ/ENQ)	Micro E-Mini Nasdaq (MNQ)
Contract Size:	$100 multiplied by the Nasdaq 100 Index	$20 multiplied by the Nasdaq 100 Index	$2 multiplied by the Nasdaq 100 Index
Exchange:	CME	EMiniCME	EMiniCME
Sector:	Index	Index	Index
Tick Size:	0.25 points	0.25 points	0.25 points
Tick Value:	$25 USD per tick	$5 USD per tick	$0.50 USD per tick
BPV:	100 basis points	20 basis points	2 basis points
Denomination:	USD	USD	USD
Decimal Place:	Two decimal places	Two decimal places	Two decimal places

Quote availability

A quote indicates a stock’s trading price on an exchange, consisting of bids (prices buyers offer) and asks (prices sellers request). Nasdaq provides quotes at three distinct levels:

Level 1 presents the highest bid alongside the lowest ask, known as the inside quote.
Level 2 includes all public quotes from market makers, showing market makers’ buy and sell interests as well as recent order information.
Level 3 is reserved for market makers to input quotes and execute transactions.

Trading schedule

Nasdaq’s trading hours in the Eastern Time Zone are structured as follows:

4:00 a.m. to 9:30 a.m.: extended premarket session
9:30 a.m. to 4:30 p.m.: standard trading session
4:00 p.m. to 8:00 p.m.: extended postmarket session

The exchange is active for approximately 253 trading days each year.

Market tiers

Within the NASDAQ Composite Index, Nasdaq organizes its listings into three distinct market segments:

Capital Market (NASDAQ-CM) caters to smaller-cap firms with lower market capitalization and more lenient listing criteria.
Global Market (NASDAQ-GM) comprises roughly 1,450 mid-cap stocks that satisfy Nasdaq’s financial, liquidity, and governance standards; it is less selective than the Global Select Market.
Global Select Market (NASDAQ-GS) consists of about 1,200 large-cap U.S. and international companies with the highest market capitalizations, subject to more rigorous financial and governance requirements and undergoing annual eligibility reviews for promotion from the Global Market.

These categories align with Nasdaq’s strategy to support companies across various sizes and developmental stages.

Difference between NYSE and Nasdaq

Nasdaq ranks as the second-largest stock exchange in the United States following the NYSE, boasting a market capitalization of $19 trillion as of 2021—approximately $5.5 trillion below that of the NYSE. Established in 1971, Nasdaq is considerably younger than its counterpart.

Key distinctions include:

Exchange systems: The NYSE combines electronic platforms with a physical trading floor staffed by specialists, whereas Nasdaq operates solely through electronic systems.
Market types: The NYSE functions as an auction market where buyers and sellers simultaneously place bids; in contrast, Nasdaq operates as a dealer market with continuously updated prices set by dealers.
Listing fees: For its lowest-tier Capital Market segment, Nasdaq charges listing fees ranging from $55,000 to $80,000.
Sectors: The NYSE is traditionally home to older, well-established enterprises; Nasdaq predominantly lists newer companies with a focus on technology and innovation.

These differences highlight each exchange’s unique operational model and target audience within the financial sector.

External links

Official website