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Financial Dictionary - NASDAQ

NASDAQ

NASDAQ (National Association of Securities Dealers Automated Quotation) is the largest electronic stock exchange in the United States.

It covers more than 3,800 New Economy companies in electronics, computing, telecommunications and biotechnology; this sets it apart from other major exchanges such as the Dow Jones or the S&P 500, which do include financial companies and do not include companies registered outside the United States.

NASDAQ manages more than 7,000 small and mid-cap stocks.

Its goal is the development of the global technology market, and it includes the world’s largest high-tech companies, including Microsoft, Apple, Google, Facebook, Cisco Systems and Pepsi.

This stock exchange operates in 24 markets worldwide and has the highest volume of shares traded per hour, with up to six billion shares traded in a day.

Although its head office is in New York, it does not have a physical location, but is hosted by a telecommunications network. It was established in response to the US Congress's demand for securities safety and regulation, as a result of the lack of transparency in the markets for OTC securities (i.e. those that are not traded on stock exchanges).

Thus, in 1970 it became the world’s first electronic stock exchange, and started operating 100% electronically in 1987.

Its success has been based on its flexibility in admission requirements, on defending shareholders, and ensuring investors have access to the same opportunities. Also, as transactions are carried out online, it does not use intermediaries.

Trading is carried out by computers that connect buyers and sellers, allowing it to operate more efficiently, transparently, and securely than the NYSE. It also does not buy empty orders, unlike the NYSE.

Lastly, it has its own indices: the NASDAQ-100, which includes the 100 largest non-financial companies with the highest sales volume on this exchange: telecommunications, software and hardware companies; the NASDAQ Composite, with more than 3,000 financial, investment and general technology companies; and the NASDAQ Biotechnology, pharma and biotech companies included in the NASDAQ Composite, listed only on the NASDAQ and with over 100,000 shares.

The NASDAQ Composite Index has eight sub-indices from the following industries: banking, IT, finance, industrial companies, insurance, telecommunications and transport.

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