What is the Nasdaq?

The Nasdaq you know and follow is much different than it was when it was first established in 1971.

Today the Nasdaq is one of the world’s leading stock exchanges. It’s second only to the New York Stock Exchange (NYSE). But when it was founded in 1971 by the National Association of Securities Dealers (NASD), the “National Association of Securities Dealers Automated Quotations” was just a quotation system and didn’t actually trade stocks.

The Nasdaq officially separated from the NASD and began to operate as a national securities exchange in 2006. In the early stages, it included a lot of stocks that traded as speculative over-the-counter (OTC) issues.

But as the Exchange became the first U.S. stock market to start trading online, it attracted new tech companies who saw it as a more modern, more dynamic place to list their stocks. Those companies included, Apple, Cisco, Dell, Microsoft and Oracle and a host of others.

The exchange’s heavy weighting toward tech and other “riskier” issues lets investors use it as a barometer of how much risk investors are willing to take on at any one time. The Nasdaq also offers a pre-market session from 4:00 am to 9:30 am Eastern, a normal trading session from 9:30 am to 4:00 pm, and a post-market session from 4:00 pm to 8:00 pm.

There are currently more than 3,000 equities listed on the exchange, many of them in the tech sector.

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