NASDAQ is the acronym used to refer to the National Association of Securities Dealers Automated Quotations. It is one of many different stock exchanges around the world and mainly focuses on technology stocks.

The History Of NASDAQ

Before NASDAQ was developed, brokers traded securities by phone. In 1971, the National Association of Securities Dealers opened NASDAQ, the first stock trading electronic bulletin board system in the world. NASDAQ developed the Small Order Execution System in response to the stock market crash in October of 1987 to give investors a way to execute trades when they cannot contact a broker. NASDAQ combined with the London Stock Exchange in 1992, creating the first international stock market.

Stocks On The NASDAQ

Stocks on the NASDAQ are primarily those of technology companies. Companies on the exchange include biotechnology, computer hardware, computer software, telecommunications, retail, financial, Internet, and wholesale companies. Major stocks on the NASDAQ include Apple, Google, Amazon.com, Qualcomm, Microsoft, and Intel. International companies are allowed on the NASDAQ as long as they meet the same qualifications as U.S. companies. Over 300 stocks on the NASDAQ are non-U.S. businesses out of over 3,000 total companies listed on the exchange. The Chinese search engine company Baidu is listed on the NASDAQ.

The NASDAQ Composite Index and NASDAQ 100

The NASDAQ Composite Index and NASDAQ 100 are indexes of stocks listed on the NASDAQ. The NASDAQ Composite Index includes all common stocks on the NASDAQ, and it is weighted to take into account market capitalization as well as stock prices. The NASDAQ 100 is an index of the 100 most important stocks on the exchange. Because of the NASDAQ's focus on technology stocks, the performance of the NASDAQ Composite Index and NASDAQ 100 are viewed as reliable indicators of how technology companies are doing overall.

Other Stock Exchanges

There are two other important U.S. stock exchanges similar to NASDAQ. The New York Stock Exchange, or NYSE, is the largest U.S.-based stock exchange. It includes companies from all around the world. The American Stock Exchange, or AMEX, consists mainly of stocks from smaller U.S. companies that do not qualify for the NASDAQ or NYSE. AMEX was owned by the National Association of Securities Dealers, the owner of the NASDAQ, from 1998 to 2004. It spent four years as an independent entity and has been owned by the NYSE since 2008. Both the NYSE and AMEX still have physical trading floors, unlike NASDAQ, which operates completely electronically.