National Association of Securities Dealers Automated Quotations, or Nasdaq for short, is a stock market located in New York City. It is the world’s second-largest stock exchange and it plays a huge role in the global economy. If you’re invested in stocks or mutual funds, there’s a good chance that your money is being tracked on the Nasdaq.
Nasdaq is an online global marketplace for buying and trading securities—the world’s first electronic exchange. It operates 29 markets, one clearinghouse, and five central securities depositories in the United States and Europe. Most of the world’s technology giants are listed on the Nasdaq.
Nasdaq stock market The first electronic stock market listing over 5000 companies. The Nasdaq stock market comprises two separate markets, namely the Nasdaq National Market, which trades large, active securities and the Nasdaq Smallcap Market that trades emerging growth companies.
The NASDAQ Stock Market is an American stock exchange designed to enable investors to buy and sell stocks on an automatic, transparent and speedy computer network.
The Nasdaq was established to provide an electronic alternative to the prevailing structure of stock exchanges, which involved having live traders on a trading floor to collect and execute orders to buy and sell shares of stock. However, the Nasdaq did not initially have investors directly trading any stocks.
Instead it used an automated information-gathering process to provide the latest prices for stock trades conducted elsewhere. From there the Nasdaq got more involved in the trading of stocks that weren’t listed on the New York Stock Exchange or other established stock exchanges.
These stocks, known as over-the-counter stocks, became the Nasdaq’s first focus, and some investors still refer to the Nasdaq as an over-the-counter market.
Also known as “the NASDAQ” (National Association of Securities Dealers Automated Quotations), the exchange’s 1971 creation represented a new way for investors to trade without doing so in-person – a methodology that the National Association of Securities Dealers (NASD) believed burdened Investors with inefficient trading and delays.
Conclusion
Let’s recap what we’ve learned in this tutorial: Stock means ownership. As an owner, you have a claim on the assets and earnings of a company as well as voting rights with your shares. Stock is equity, bonds are debt. Bondholders are guaranteed a return on their investment and have a higher claim than shareholders.
This is generally why stocks are considered riskier investments and require a higher rate of return. You can lose all of your investment with stocks. The flip-side of this is you can make a lot of money if you invest in the right company.
The two main types of stock are common and preferred. It is also possible for a company to create different classes of stock. Stock markets are places where buyers and sellers of stock meet to trade.
The NYSE and the Nasdaq are the most important exchanges in the United States.
Stock prices change according to supply and demand. There are many factors influencing prices, the most important being earnings. There is no consensus as to why stock prices move the way they do.
To buy stocks you can either use a brokerage or a dividend reinvestment plan (DRIP).
Stock tables/quotes actually aren’t that hard to read once you know what everything stands for! Bulls make money, Bears make money, but Pigs get slaughtered! Whew! Seems like we covered a lot. We hope that this tutorial has given you a good idea of what stocks are and how the stock market works