The NASDAQ, an acronym for National
Association of Securities Dealers Automated Quotations, is an electronic stock
exchange with 3,300 company listings. It currently has a greater trading volume
than any other U.S. exchange, making approximately 1.8 billion trades per day.
The NYSE is still considered the biggest exchange because its market
capitalisation far exceeds that of the NASDAQ. The NASDAQ trades shares in a
variety of companies, but is well known for being a high-tech exchange, trading
many new, high growth, and volatile stocks. This is partially due to the fact
that the listing fees on the NASDAQ are significantly lower than those for the
NYSE, with the maximum price only $150,000. The NASDAQ is a publicly owned
company, trading its shares on its own exchange under the ticker symbol NDAQ.
The NASDAQ, as an electronic exchange,
has no physical trading floor, but makes all its trades through a computer and
telecommunications system. The exchange is a dealers' market, meaning brokers
buy and sell stocks through a market maker rather than from each other. A
market maker deals in a particular stock and holds a certain number of stocks
on his own books so that when a broker wants to purchase shares, he can
purchase them directly from the market maker.
Since there is no trading floor where
the NASDAQ operates, the stock exchange built the NASDAQ MarketSite
in New York's Times Square to create a physical presence. The tower has a large
outdoor electronic display, giving current financial information 24 hours a
day. The company also has a studio here where it broadcasts financial market
updates.
For a stock to be listed on the NASDAQ
National Market, the company must meet certain strict financial criteria. For
example, they must maintain a stock price of at least $1, and the total value
of outstanding stocks must be at least $1.1 million. However the NASDAQ also
has a market for smaller companies unable to meet these and other requirements,
called the NASDAQ Small Caps Market. NASDAQ will move companies from one market
to the other as their eligibility changes.
For more information, consult the NASDAQ website: