Some time ago Finex explained about market indices.
The function of a market index is to track the performance of a specific group of stocks, bonds or other investments.
Many investors use market indices to manage their investment portfolios and to track updates on the financial markets.
Indices give investors a simple overview of large market sectors, without having to examine each asset individually.
This time Finex will explain about one of the stock market indices called Nasdaq-100.
Trade with technical analysis and fundamental analysis.
History of Nasdaq
NASDAQ originally stood for National Association of Securities Dealers Automated Quotations.
Nasdaq was previously a subsidiary of the National Association of Securities Dealers (NASD) which is now known as the Financial Industry Regulatory Authority (FINRA).
Nasdaq stood on its own after the Securities and Exchange Commission (SEC) encouraged NASD to automate the market for unlisted securities.
As a result, Nasdaq opened as the first electronic trading system on February 8, 1971.
This entity provided automated stock price information that investors could use to trade stocks on other exchanges.
Nasdaq developed into the world’s first electronic stock market, taking over transactions for stocks that were previously traded in venues other than formal stock exchanges.
Until recently, Nasdaq had formal listing requirements that companies had to meet to list their shares on the exchange.
Today, Nasdaq has become the largest global exchange that relies on electronic transactions.
Many of the world’s largest companies, including more than 3,700 companies, list their shares on Nasdaq.
This is partly due to the way Nasdaq has innovated technology in its trading platform, which in turn has attracted many of the world’s leading technology companies, such as Apple Inc. (AAPL), Microsoft (MSFT), Google parent Alphabet (GOOG, GOOGL), Meta Platforms Inc. (META), Amazon.com Inc. (AMZN) and Tesla Inc. (TSLA).
Some investors also use the term Nasdaq to refer to the Nasdaq Composite Index, which is an index of stocks listed on the Nasdaq Stock Market.
Nasdaq-100
The Nasdaq-100 Index consists of the 100 largest and most actively traded US companies listed on the Nasdaq stock exchange.
The index includes companies from various industries, in addition to the financial industry, such as commercial banks and investment banks.
Non-financial sectors include retail, biotechnology, industrial, technology and healthcare.
The Nasdaq-100 is built on a modified capitalization methodology. This modified method uses individual weighting of the included items according to their market capitalization.
The weighting allows the application of restrictions to limit the influence of the largest companies and balance the index with all members.
To achieve this, Nasdaq reviews the index composition quarterly and adjusts the weights if the distribution requirements are not met.
How to Trade on Nasdaq
The Nasdaq-100 is traded by Invesco QQQ Trust. Each listed stock must have an average daily trading volume of 200,000 and publicly report earnings quarterly and annually.
Some exceptions are made for new public companies that have a very high market capitalization.
Thanks to the combined performance tracking data of different companies and various investments, investment funds based on leading indices are considered the best way to make this type of investment quickly, easily, and cheaply.
How to start trading for beginners.
You can co-invest in the Nasdaq index _.Just by signing up for a Pro account, you will have the opportunity to invest in Nasdaq and 6 other specialized indices.
Now is the time to make a profit by opening an account with Finex.
The Pro account also gives you the opportunity to trade 27 of the most popular Forex currency pairs, 33 stocks of international companies, as well as beautiful commodities such as WTI crude oil, Gold, and Silver.