What Is Nasdaq?
Nasdaq is a global virtual marketplace for buying and selling securities. Its determine was once as soon as to start with an acronym for “National Association of Securities Dealers Automatic Quotations”—Nasdaq started as a subsidiary of the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq was once as soon as presented after the Securities and Trade Charge (SEC) urged NASD to automate the market for securities not listed on an trade. The result was once as soon as the principle virtual purchasing and promoting system. Nasdaq opened for industry on Feb. 8, 1971.
Key Takeaways
- Nasdaq is an internet global marketplace for buying and purchasing and promoting securities—the sphere’s first virtual trade.
- It operates 29 markets, one clearinghouse, and 5 central securities depositories in the usa and Europe.
- Most of the world’s era giants are listed on the Nasdaq.
Understanding Nasdaq
The period of time “Nasdaq” is also used to talk about with the Nasdaq Composite, an index of more than 3,700 stocks listed on the Nasdaq trade that contains era giants Apple Inc. (AAPL), Microsoft (MSFT), Google guardian Alphabet (GOOG, GOOGL), Meta Platforms Inc. (META), Amazon.com Inc. (AMZN) and Tesla Inc. (TSLA).
Nasdaq officially separated from the NASD and began to accomplish as a national securities trade in 2006. In 2008, it blended with the Scandinavian exchanges personnel OMX to turn out to be the Nasdaq OMX Body of workers. The company changed its determine to Nasdaq Inc. (NDAQ) in 2015.
Headquartered in New York, the Nasdaq operates 29 markets enabling the purchasing and promoting of stocks, derivatives, fastened income and commodities throughout the U.S., Canada, Scandinavia and the Baltics. the company moreover runs a clearinghouse and 5 central securities depositories in the usa and Europe. Its purchasing and promoting era is used by 100 exchanges in 50 countries. Nasdaq Inc is listed on the Nasdaq stock market beneath the brand NDAQ and has been part of the S&P 500 Index since 2008.
Tale of Two Nasdaqs’ Booms and Busts
The Nasdaq automatic purchasing and promoting system was once as soon as to begin with devised as a substitute for the inefficient “specialist” system, which were the prevalent model for just about a century. The short evolution of era has made Nasdaq’s virtual purchasing and promoting model the standard for markets world.
It was once as soon as best changing into for the sphere’s up-and-coming era corporations to report on an trade the use of the latest era. Since the tech sector grew in prominence throughout the Nineteen Eighties and Nineteen Nineties, the Nasdaq Composite Index turn into its maximum normally quoted proxy.
That grew to turn into Nasdaq Composite into the index of the dot-com building up and bust. After rallying near to 150% throughout the 16 months by way of March 2000, the Nasdaq Composite then slumped just about 80% thru October 2002.
Fresh History of Nasdaq
On November 2016, Chief Operating Officer Adena Friedman was once as soon as promoted to the location of CEO, becoming the principle woman to run an important trade in the usa.
Board Vary Disclosure Rule
On Dec. 1, 2020, Nasdaq proposed a brand spanking new rule requiring corporations listed on the trade to report on the vary of their board of directors. The rule of thumb of thumb calls for companies to include on their boards no less than one female director and one that is a member of an underrepresented minority or LGBTQ+, or to publicly give an explanation for why they have got not performed so. The SEC authorized the board vary disclosure rule on Aug. 6, 2021.
Financial Potency
Nasdaq generates income from consumers, along with financial institutions, brokers, institutional buyers, and companies. Nasdaq’s income is mainly derived from fees charged for the following:
- Market services, which provide buyers get right to use to fairly a large number of markets
- Investment intelligence: data, indices, and investment analytics for financial institutions, brokers, and asset managers
- Market era, which incorporates purchasing and promoting and settlement platforms along with era safeguards against financial crime
- Corporate services, an identical to checklist fees and investment family members services
For Q1 2022 ended March 31, Nasdaq reported web income of $283 million on income of $1.54 billion, and income a lot much less transaction-based expenses of $892 million. The company moreover upper the quarterly dividend thru 11% to $0.60 in keeping with percentage and presented plans to seek SEC and shareholder popularity of a 3-to-1 stock get a divorce to be completed throughout the third quarter of 2022.
Nasdaq Composite Index Potency
The Nasdaq Composite closed at a report high of 16,057.44 on Nov. 19, 2021. The index proceeded to drop more than 23% from that point by way of April 2022. The Nasdaq Composite’s 13.3% decline in April 2022 was once as soon as its worst per 30 days drop since October 2008, when the index out of place 17.4% amid the global financial crisis.
