What is it?

The NASDAQ is one of the main stock exchanges in the United States. NASDAQ stands for National Association of Securities Dealers Automated Quotations system and was founded in 1971.

NASDAQ is the largest electronic equity securities market in the United States with around 3,200 listed companies. Based on the daily average of trades completed, the NASDAQ is the most active stock market in the world.

Back on February 8 1971 when it was first started by the National Association of Securities Dealers, it was the world’s first electronic stock market even though it was simply a computer bulletin board and did not actually connect buyers and sellers.

The NASDAQ did much in terms of lowering the spread (the difference between the bid and ask prices of a stock) but this was not initially considered a good thing by many brokerages who made much of their money on the spread.

Landmarks

On July 17 1995, the market closed above the 1,000 mark for the first time and strong trading took it to an all time intraday high of 5,132.52 on March 10 2000. This point marked the beginning of the end for the infamous dot-com bubble and over the next year the NASDAQ lost half its value. The bear market that followed finally bottomed out at 1,108.49 in October 2002 and at the time of writing it has recovered to just over 2,500 still less than half its peak.

Trading the NASDAQ from the UK

There are several online trading companies that accommodate trading on the NASDAQ such as iii but the flat fees per trade will often be higher than those for UK trades. An alternative is to trade the NASDAQ as an entire index by utilising the increasingly popular method of spread betting .