Nasdaq
The Nasdaq Stock Market (/ˈnæzdæk/ ⓘ; National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume,[3] and ranked second on the list of stock exchanges by market capitalization of shares traded, behind the New York Stock Exchange.[4] The exchange platform is owned by Nasdaq, Inc.,[5] which also owns the Nasdaq Nordic stock market network and several U.S.-based stock and options exchanges.
"Nasdaq" was initially an acronym for the National Association of Securities Dealers Automated Quotations.[6] It was founded in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority.[7] On February 8, 1971, the Nasdaq stock market began operations as the world's first electronic stock market.[7] At first, it was merely a "quotation system" and did not provide a way to perform electronic trades.[8]
The NASDAQ Stock Market eventually assumed the majority of major trades that had been executed by the over-the-counter (OTC) system of trading, but there are still many securities traded in this fashion. As late as 1987, the Nasdaq exchange was still commonly referred to as "OTC" in media reports[9] and also in the monthly Stock Guides (stock guides and procedures) issued by Standard & Poor's Corporation.[10] Over the years, it became more of a stock market by adding trade and volume reporting and automated trading systems. In 1981, Nasdaq traded 37% of the U.S. securities markets' total of 21 billion shares. By 1991, Nasdaq's share had grown to 46%.[11] In 1992, the Nasdaq Stock Market joined with the London Stock Exchange to form the first intercontinental linkage of capital markets.[12]
In 1996, the SEC issued a report alleging that Nasdaq market makers fixed prices by avoiding "odd-eighths" quotes (at the time, stock prices were quoted in increments of an eighth of a dollar) to artificially widen spreads. The report was followed by a new set of rules for how Nasdaq handled orders.[13]: 102, 126
In 1998, it became the first stock market in the United States to trade online, using the slogan "the stock market for the next hundred years".[14] The Nasdaq Stock Market attracted many companies during the dot-com bubble.
Its main index is the NASDAQ Composite, which has been published since its inception. The QQQ exchange-traded fund tracks the large-cap NASDAQ-100 index, which was introduced in 1985 alongside the NASDAQ Financial-100 Index, which tracks the largest 100 companies in terms of market capitalization.
