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Nasdaq

Nasdaq
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What Is Nasdaq?

Nasdaq is a global electronic marketplace for buying and selling securities. Its name was initially an abbreviation for "National Association of Securities Dealers Automated Quotations" — Nasdaq began as a subsidiary of the National Association of Securities Dealers (NASD), presently known as the Financial Industry Regulatory Authority (FINRA). Nasdaq was sent off after the Securities and Exchange Commission (SEC) encouraged NASD to computerize the market for securities not listed on an exchange. The outcome was the principal electronic trading system. Nasdaq really got started on Feb. 8, 1971.

Figuring out Nasdaq

The term "Nasdaq" is likewise used to allude to the Nasdaq Composite, an index of in excess of 3,700 stocks listed on the Nasdaq exchange that incorporates technology monsters Apple Inc. (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOG, GOOGL), Meta Platforms Inc. (META), Amazon.com Inc. (AMZN) and Tesla Inc. (TSLA).

Nasdaq formally isolated from the NASD and started to operate as a national securities exchange in 2006. In 2008, it combined with the Scandinavian exchanges group OMX to turn into the Nasdaq OMX Group. The company changed its name to Nasdaq Inc. (NDAQ) in 2015.

Headquartered in New York, the Nasdaq operates 29 markets empowering the trading of stocks, derivatives, fixed income and commodities in the U.S., Canada, Scandinavia and the Baltics. the company likewise runs a clearinghouse and five central securities storehouses in the United States and Europe. Its trading technology is involved by 100 exchanges in 50 countries. Nasdaq Inc is listed on the Nasdaq stock market under the symbol NDAQ and has been part of the S&P 500 Index beginning around 2008.

Story of Two Nasdaqs' Booms and Busts

The Nasdaq mechanized trading system was initially concocted as an alternative to the inefficient "subject matter expert" system, which had been the predominant model for very nearly a century. The quick advancement of technology has made Nasdaq's electronic trading model the standard for markets worldwide.

It was just fitting for the world's remarkable new technology companies to list on an exchange utilizing the most recent technology. As the tech sector filled in noticeable quality during the 1980s and 1990s, the Nasdaq Composite Index turned into its most widely quoted proxy.

That transformed Nasdaq Composite into the index of the [dot-com boom](/dotcom-air pocket) and bust. Subsequent to revitalizing almost 150% in the 16 months through March 2000, the Nasdaq Composite then, at that point, drooped practically 80% by October 2002.

Recent History of Nasdaq

On November 2016, Chief Operating Officer Adena Friedman was elevated to the job of CEO, turning into the primary lady to run a major exchange in the United States.

Board Diversity Disclosure Rule

On Dec. 1, 2020, Nasdaq proposed another rule requiring companies listed on the exchange to report on the diversity of their board of directors. The rule expects companies to remember for their boards no less than one female director and one who is a member of an underrepresented minority or LGBTQ+, or to publicly make sense of why they have not done as such. The SEC approved the board diversity disclosure rule on Aug. 6, 2021.

Financial Performance

Nasdaq produces revenue from clients, including financial institutions, brokers, institutional investors, and corporations. Nasdaq's revenue is basically derived from fees charged for the accompanying:

  • Market services, which give investors access to different markets
  • Investment intelligence: data, indices, and investment analytics for financial institutions, brokers, and asset supervisors
  • Market technology, which incorporates trading and settlement platforms as well as technology shields against financial wrongdoing
  • Corporate services, for example, listing fees and investment relations services

For Q1 2022 ended March 31, Nasdaq reported net income of $283 million on revenue of $1.54 billion, and revenue less exchange based expenses of $892 million. The company likewise increased the quarterly dividend by 11% to $0.60 per share and announced plans to look for SEC and shareholder endorsement for a 3-to-1 stock split to be completed in the second from last quarter of 2022.

Nasdaq Composite Index Performance

The Nasdaq Composite closed at a record high of 16,057.44 on Nov. 19, 2021. The index continued to drop over 23% starting there through April 2022. The Nasdaq Composite's 13.3% decline in April 2022 was its most horrendously awful month to month drop since October 2008, when the index lost 17.4% in the midst of the global financial crisis.

Highlights

  • It operates 29 markets, one clearinghouse, and five central securities stores in the United States and Europe.
  • The greater part of the world's technology goliaths are listed on the Nasdaq.
  • Nasdaq is an online global marketplace for buying and trading securities — the world's most memorable electronic exchange.