Tuesday, October 20, 2009

NASDAQ Finance, What Does it Involve?

By : Mercy Maranga

NASDAQ is the short term for National Association of Securities Dealers Automated Quotations and is a computerized trading system that was founded by the National Association of Securities Dealers (NASD). It is specifically designed for trading over-the-counter stocks and is the second largest stock exchange in the United States. There are many well established companies that are listed in the NASDAQ and some of them are Apple, Amazon, eBay, Google, Microsoft etc.

Since its inception in 1971, it has about three thousand two hundred publicly traded companies. In comparison to the New York Stock exchange, the NASDAQ is that it has always conducted its business electronically. They use the automated trading systems which contain full reports on trades and the daily trading volumes.

The primary index is the NASDAQ 100 which generally consists of one hundred of the biggest companies in market value that trade in the NASDAQ. The companies are from different markets apart from financial service companies, which are included in their own index. An index is a collection of stocks, which can range from a few dozen companies to several thousand, which are combined in order to have a clear picture of the overall performance of the market.

There are usually companies that are added or removed from the NASDAQ 100. This is determined by the ranking in their market value. A publicly traded company is only permitted to trade on one stock exchange especially at the start when they begin offering stock to the public. A company may occasionally move from one stock exchange to another.

Mercy Maranga writes content on Finance and Finance Management. Visit her site here for more information on Finance. NASDAQ Finance

Article Source: http://EzineArticles.com/?expert=Mercy_Maranga

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