The NASDAQ (acronym for National Association of Securities Dealers Automated Quotations system) is an American stock market founded on February 8, 1971. It is owned and operated by The Nasdaq Stock Market, Inc. and is the largest electronic screen-based online trading equity securities market in the United States.
Many investors from all over the world are nowadays trading on the electronic trading stock market called NASDAQ. The market has been up and running for about 36 years and is growing at a fast pace. There are different indexes available on the market including the NASDAQ Composite, the large-cap NASDAQ 100, as well as the NASDAQ 100 Financial Index. All of which contain numerous non-US listings. The NASDAQ is considered the most traded market in the United States of America.
As of 1 March 2007, almost 5,100 companies including small, growing companies as well as many large corporations that have become household names, trade their securities on this electronic market. Approximately two out of every seven shares traded on the American financial markets is traded on the system. For NYSE listed securities or Tape A, it accounts for about 14-15% of the shares traded. For Tape C securities, it accounts for approximately 45-98% of the trading volume.
NASDAQ Stock Market has a sliding fee system based on how much trading volume the market participant executes on the NASDAQ system. Higher the volume executed on the system, lower is the liquidity removal fees and more favorable is the added-liquidity rebates.
NASDAQ works as an online trading system by having “market makers” compete directly against each other to buy and to sell at the best possible price. These market makers provide depth by being ready to commit money to the stocks for which they are registered, to ensure continuous smooth trading for all listed companies. Because buyers and sellers know there is a market ready for every issue, allowing them to trade more quickly and with more confidence- but also allowing them to hold shares knowing they can be sold later.
Investors and traders are offered three levels of quotes. Level I, the inside quote, is the highest bid and lowest offer. The second level combines all the market makers’ public quotes with the information of those market makers who want to trade stocks and recently executed trades. Level III, designed for the market makers, allows quotes to be entered and orders to be executed. NASDAQ’s continued innovation opens new possibilities for what a stock market is and what it can become.
The National Association of Securities Dealers Automated Quotations system (NASDAQ) is an American market of stocks established in 1971. It is operated and owned by Nasdaq Stock Market inc. and is the wider screen based electronic online trading of equity security in the USA. In 1971, NASDAQ became the world’s first exclusively electronic trading market for equities, and now serves millions of people. The Stock Market named NASDAQ uses a sliding fee method based on the quantity of trading the market parts enact on the NASDAQ systems. NASDAQ’s continued innovation opens new possibilities for what a stock market is and what it can become.
- Mark Crisp
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