The Nasdaq Stock Market (formerly National Association of Securities Dealers Automated Quotations) is an American stock exchange. It is the second-largest stock exchange by market capitalization and the first fully electronic stock market. Based in Manhattan, New York City, the exchange is among the most active stock trading venues by volume in the United States.
The exchange platform is owned by Nasdaq, Inc., which also owns the Nasdaq Nordic stock market network and several U.S.-based stock and options exchanges. The exchange is the primary listing for many technology companies and also trades stock in many foreign firms, with China and Israel being the largest foreign sources.
As of December 31, 2024, 4,075 companies listed securities on Nasdaq, including 1,383 listings on Nasdaq Global Select Market, 1,366 on Nasdaq Global Market, and 1,326 on Nasdaq Capital Market.
The Nasdaq Composite, Nasdaq-100, and Nasdaq Financial-100 stock market indices are made up only of stocks listed on the Nasdaq.
Nasdaq, Inc. was founded in 1971 by the National Association of Securities Dealers (NASD), now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq did not have a physical trading floor, unlike other traditional stock exchanges, including the New York Stock Exchange. "Nasdaq" (originally and still commonly spelled with all-capital letters as "NASDAQ") is an acronym for The "National Association of Securities Dealers Automated Quotations". On February 8, 1971, the Nasdaq Stock Market commenced operations as the world's first fully electronic stock market. Initially, Nasdaq served as a "quotation system" rather than a platform for electronic trading. Intel Corporation was one of the first major corporations to list its shares on Nasdaq; other major companies that have been listed on Nasdaq since its early years include Comcast and Applied Materials.
Since the launch of Nasdaq, many major companies trading on the over-the-counter (OTC) market began switching to Nasdaq. As late as 1987, the Nasdaq exchange was still commonly referred to as "OTC" in media reports and also in the monthly Stock Guides issued by Standard & Poor's Corporation. Over the years, it became more of a stock market with the addition of trade and volume reporting and automated trading systems. In 1981, Nasdaq traded 37% of the U.S. securities markets' total of 21 billion shares. By 1991, Nasdaq accounted for approximately 46% of U.S. securities trading volume. In 1992, the Nasdaq Stock Market joined with the London Stock Exchange to form the first intercontinental linkage of capital markets.
In 1996, the SEC issued a report alleging that Nasdaq market makers fixed prices by avoiding "odd-eighths" quotes (at the time, stock prices were quoted in increments of an eighth of a dollar) to artificially widen spreads. The report was followed by a new set of rules for how Nasdaq handled orders.
In 1998, it became the first stock market in the United States to trade online, using the slogan "the stock market for the next hundred years". The Nasdaq Stock Market attracted many companies during the dot-com bubble.
Public listing and market change
In a series of sales in 2000 and 2001, FINRA sold its stake in the Nasdaq. On July 2, 2002, Nasdaq, Inc. became a public company via an initial public offering, listing its own shares on the exchange (traded under the ticker symbol NDAQ). In 2006, the status of the Nasdaq Stock Market was changed from a stock market to a licensed national securities exchange. In 2007, it merged with OMX, a leading exchange operator in the Nordic countries, expanded its global footprint, and changed its name to the Nasdaq OMX Group.
To qualify for listing on the exchange, a company must be registered with the United States Securities and Exchange Commission (SEC), must have at least three market makers (financial firms that act as brokers or dealers for specific securities) and must meet minimum requirements for assets, capital, public shares, and shareholders.
In 2011, after an announced merger of NYSE Euronext with Deutsche Börse, Nasdaq partnered with Intercontinental Exchange to launch a rival bid, but the bid was withdrawn on regulatory concerns.
In December 2005, Nasdaq acquired Instinet for $1.9 billion, retaining the Inet ECN and subsequently selling the agency brokerage business to Silver Lake Partners and Instinet management.
The European Association of Securities Dealers Automatic Quotation System (EASDAQ) was founded as a European equivalent to the Nasdaq Stock Market. It was purchased by Nasdaq in 2001 and became Nasdaq Europe. In 2003, operations were shut down as a result of the burst of the dot-com bubble. In 2007, Nasdaq Europe was revived first as Equiduct and was acquired by Börse Berlin later that year.
On November 7, 2007, Nasdaq acquired the Philadelphia Stock Exchange, the oldest stock exchange in the U.S.
Sustainability and leadership milestones
On June 18, 2012, Nasdaq OMX became a founding member of the United Nations Sustainable Stock Exchanges Initiative on the eve of the United Nations Conference on Sustainable Development (Rio+20).
In November 2016, chief operating officer Adena Friedman was promoted to chief executive officer, becoming the first woman to serve as chief executive officer of a major U.S. exchange.