Nasdaq Composite

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The Nasdaq Composite is the US stock index that includes national and international stocks where more than 5,200 companies are listed (at the end of this article). It was created in 1971 with a base of 100.

The companies that make up the index follow the capitalization criteria. The Nasdaq is a very volatile index where the most important technology companies in the world are integrated and in many sessions, the dispersion in prices and their movements are stronger than in the NYSE (New York Stock Exchange).

The Nasdaq index comes from the acronym National Association of Securities Dealers Automated Quotation and is the most important electronic stock exchange in the world. Its most important indices are the Nasadq100, the Nasdaq Composite and the Nasdaq Biotechnology. The Nasdaq Composite is made up of eight indices from sectors such as banking, computing, finance, industrial companies, insurance, telecommunications, transportation (These data are updated as of the writing of this article).

In the Nasdaq, the official who controls the traffic of the actions is known as the creator of market (market maker), that works with the buyers and sellers to maintain the constant circuit of operations.

Thanks to new technologies, the world's exchanges are connected 24 hours a day. Large investment funds move from one side of the world to the other in a matter of seconds, trying to get the most benefit.

The Nasdaq is a market where its participants do not buy and sell directly among themselves, but through brokers. Market markers are companies that belong to the Nasdaq that acquire and sell shares instantly at the best prices available, through its large computer network to which operators from all over the world are connected.

Nasdaq companies cover the entire spectrum of the United States economy, from industrial companies to transportation, with strong representation from the world of computing and information technology. Many well-known North American companies have chosen Nasdaq, including: Adobe Systems, Amazon.com, Microsoft, Cisco, Dell Computer Corporation, Intel Corporation, and Yahoo.

Trading hours in local US time are 9:00 AM to 4:00 PM. Generally, the Nasdaq Composite is a very important underlying asset, but most financial derivatives replicate the Nasdaq 100 price where we can find a selection of the most important technology companies in the world.

The maximum price of the Nasdaq Composite (at the time of writing) has come to approach 5,050 basis points.

Nasdaq Composite Benefits

The Nasdaq provides company securities with immediate access to investors, market visibility and conditions that facilitate immediate and continuous trading. The following benefits stand out then:

  • Liquidity: Shares can be bought and sold easily and quickly.
  • Market depth: The total money that exists on the investment of a security in relation to the number of investors that operate in this security.
  • Transparency: All prices are transmitted through a routing network and, therefore, can be easily viewed.
  • Price efficiency: The investor has access to the best prices.

Below, we can see a graph of the index:

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