NASDAQ, which stands for the National Association of Securities Dealers Automated Quotations, is a leading electronic marketplace for buying and selling securities in the United States. Founded in 1971 by the National Association of Securities Dealers (NASD), NASDAQ was the world’s first electronic stock market. Over the years, it has grown into one of the largest stock exchanges globally, known for its technology-driven approach and focus on technology, biotechnology, and fintech sectors.
How NASDAQ Operates
Unlike traditional stock exchanges such as the New York Stock Exchange (NYSE), which use a physical trading floor, NASDAQ operates entirely electronically. Market participants, including investors, traders, and market makers, can access NASDAQ‘s trading platform through computer networks. This electronic trading system allows for faster execution of trades and provides greater transparency in price quotes and trading volumes.
NASDAQ Listing Requirements
Companies seeking to list their securities on NASDAQ must meet specific listing requirements set by the exchange. These requirements include minimum thresholds for assets, shareholder equity, and market capitalization, as well as corporate governance standards and financial reporting obligations. Meeting these requirements demonstrates a company’s financial stability and helps maintain the integrity of the NASDAQ marketplace.
Market Segments
NASDAQ is organized into several market segments based on the size and characteristics of the companies listed. The NASDAQ Global Select Market includes companies that meet the highest initial listing standards and liquidity requirements. The NASDAQ Global Market caters to companies with slightly lower listing standards, while the NASDAQ Capital Market is designed for emerging growth companies and smaller firms. Additionally, NASDAQ operates several other market segments focusing on specific asset classes, such as options, futures, and fixed income securities.
Technology and Innovation
NASDAQ is renowned for its innovative approach to technology and its role in revolutionizing the way securities are traded. The exchange continually invests in cutting-edge technology to enhance trading efficiency, improve market surveillance, and expand its product offerings. NASDAQ‘s commitment to innovation has made it a preferred listing venue for technology companies and has contributed to its reputation as a leader in the global financial markets.
