BACKGROUND
Nasdaq was created on February 8, 1971 by the National Association of Securities Dealers
Automated Quotations
National Association of Securities Dealers to regulate chaotic over-the-counter transactions
and provide financing platforms for small businesses
is ranked second on the list of stock exchanges by market capitalization of shares traded,
behind only the New York Stock Exchange nowadays.
The Nasdaq Stock Market is the fastest growing market in the worlds major stock markets,
and it is the first electronic stock market
February 20, 2020, selected for Forbes Blockchain Top 50 list
PARTICIPANTS
Market participants in NASDAQ can be divided according to their role. There are two parts;
1. The buy-side
▪ Individuals (retail investor, forging investors, institutional investor),
companies, fund managers, governments)
2. People who provide market services are the “sell-side".
▪ Dealers, brokers, broker-dealers.
The sell side of the trading industry includes dealers and brokers who provide exchange
services to the buy-side.
▪ Dealers accommodate trades that their clients want to make by trading with them. ▪
Traders profit when they buy low and sell high.
▪ Brokers trade on behalf of their clients.
▪ Brokers arrange trades that their clients want to make by finding other traders who
will trade with their clients.
COMPARISON
§ ASX like NASDAQ also has brokers and dealers
§ On both ASX and NASDAQ, there is a large number of individual investors
§ Retail investors
§ Foreign investors
INSTRUMENTS
The 3 main instruments that are sold on NASDAQ are;
EQUITY
- Shares/stocks
- The Nasdaq contains all of the companies that trade on the Nasdaq. Most
are technology and internet-related, but there are financial, consumer,
biotech, and industrial companies as well.
- There are over 3000 stocks listed on NASDAQ. Last year in 2019
6.43 billion shares were traded on average each day.
FUNDS
- Index funds
- ETF
- In 2000 60% of U.S. Adults were invested in the stock market though Mutual Funds,
Retirement Plans or Directly.
DERRIVITVES
Stock options
Broken down into small cap, medium cap and large cap
Small cap
Small cap is a term used to classify companies with relatively small market
capitalization. A company's market capitalization is the market value of its
outstanding shares. The definition of small cap can vary among brokerages,
but it is generally a company with a market capitalization of between US$300
million and $2 billion.