It is impossible not to mention the Nasdaq when it comes to US stock exchanges. What’s exceptional about the fact that the US stock exchange NASDAQ is becoming so famous all over the world? The following article learns about the NASDAQ exchange and all the information you need to know about this exchange.
What is the NASDAQ U.S. Stock Exchange?
NASDAQ is an abbreviation of the phrase National Association of Securities Dealers Automated Quotations System.
The NASDAQ is one of the leading stock exchanges in the United States. The NASDAQ stock exchange is globally famous with the second largest market capitalization in the United States, just behind the NYSE exchange. Currently, the daily trading volume of the NASDAQ is a leader worldwide.
The Nasdaq is the first electronic exchange in the world. The critical difference between the NASDAQ and other major stock exchanges is an over-the-counter (OTC) stock exchange. The Nasdaq is based in the United States and currently allows trading on 29 global stock markets. Most of the world’s best tech stocks are listed on the Nasdaq. In addition, the shares traded on the NASDAQ also belong to various sectors such as finance, healthcare, energy, consumer goods, public works, transportation and technology….
The official website of the Nasdaq is https://www.nasdaq.com/.
The NASDAQ also lists its shares under the ticker NDAQ and has been part of the S&P 500 index since 2008.
The NASDAQ Composite Index is built on the basis of the stock prices of all nasdaq-listed companies. The NASDAQ Composite is often referred to as the NASDAQ Index. The NASDAQ index is now a widely traded representative of the world.
Investors should distinguish it from the NASDAQ 100. The NASDAQ 100 is an extract of the top 100 non-financial companies and is considered the most observed index for technology companies.
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History and Outstanding Milestones of the NASDAQ Stock Exchange
Nasdaq was founded in 1971 by the National Association of Securities Traders (NASD) and is currently operated by Nasdaq Stock Market, Inc.
In 1987, most trading was conducted by phone, but market makers hardly answered the phone during the 1987 stock market crash. The Nasdaq comes after the Securities and Exchange Commission (SEC) urged nasd to automate the market for unlisted securities.
When it was established, the NASDAQ was simply a system that listed stock prices. Adjust the difference between bid and ask prices. After once, it is traded between participants and becomes a stock exchange.
The Nasdaq officially separated from the NASD and began operating as a national stock exchange in 2006. In 2008, it merged with Scandinavian exchange group OMX to become Nasdaq OMX Group. The company changed its name to Nasdaq Inc. (NDAQ) in 2015.
In 2019, the NASDAQ became the most important electronic stock exchange in the United States.
Conditions for listing a company on the NASDAQ
Unlike other stock exchanges in the United States, NASDAQ-listed companies are often targeted for growth rather than large-scale companies. In addition, the cost of listing on the Nasdaq is cheaper than on other exchanges, which is also a criterion that causes many companies to choose the NASDAQ. The NASDAQ listing fee is only 150000 USD.
Companies must meet specific financial criteria to be listed on the NASDAQ stock exchange. These criteria are divided into four categories, including income, capital, market value, and total value of total assets/income.
Suppose a company is listed based on income criteria. In that case, the company must have a pre-tax income from the previous year or the payment of two years in the last three years exceeding 1 million USD with a total net worth that reaches 15 million USD.
If a company wants to list under equity valuation, the requirements are higher for shareholders who own at least $30 million.
The company can also select valuation criteria based on total market value with a minimum standard of $75 million.
In addition, if a company that meets the criteria of total asset value or total income of the previous year or payment of two years in the last three years must be more than 75 million USD, it is also selected for listing on the Nasdaq stock exchange.
During the approval process for listing on the Nasdaq, some other conditions are as follows: the minimum percentage of shares held by the public must be 1.1 million shares, with the total market value of public shares at $8 million, $18, or $20 million. In particular, the company must ensure that its shares are traded at over $4 for at least 90 days before applying for listing.
In addition, for small businesses that cannot meet the financial requirements of the NASDAQ, there is an exchange dedicated to them, the NASDAQ Small Caps Market. The NASDAQ will move companies from one market to another as eligibility changes.
Above is some vital information associated with the US stock exchange NASDAQ. Nasdaq is a decentralized exchange. The Nasdaq serves as a trader’s market for brokers to buy and sell stocks through dealers, not directly to each other. Since its inception, the Nasdaq has proven to be the leader of an electronic exchange, becoming the largest stock exchange in the United States by trading volume and the second largest globally. This is where the world’s leading tech stocks come together.