NASDAQ Stock Market: (founded 1971) “National Association of Securities Dealers Automated Quotations”... this market is the largest electronic based market in the US. The NASDAQ has the highest electronic trading volume in the world. This market was also groundbreaking, because it was the first to advertise to the general public.
*The world’s first electronic stock market. However, the market did not initially directly connect buyers and sellers.
NASDAQ Composite: (1985) this tracks the top 100 stocks within the market.
The October 1987 Market Crash: Up until this time, most of the trading that took place was done via telephone. This stock crash changed the way the NASDAQ did business. During this time, many investors were not answering their phones. This brought about “Small Order Execution System” (SOES). The SOES allowed traders to make transactions electronically and the NASDAQ required these trades to be valid.
London Connections: (1992) the NASDAQ joined with the London Stock Exchange to form the first intercontinental securities markets. This was a major step for the globalization of markets.
NASDAQ-Amex Market Group: (1998) a merger with the American Stock Exchange made the NASDAQ the largest electronic market (in volume and dollars) in the US.
Philadelphia Stock Exchange: (2000) the oldest stock exchange, founded in 1790, was purchased by the NASDAQ for 652 million dollars.
1) Register with the SEC.
2) Have at least 3 market makers (financial firms; brokers).
3) Meet minimum requirements (assets, capital, public shares, shareholders, etc.).
NASDAQ quotes are available at three levels:
- Level 1 shows the highest bid and lowest offer — the inside quote.
- Level 2 shows all public quotes of market makers together with information of market dealers wishing to sell or buy stock and recently executed orders.
- Level 3 is used by the market makers and allows them to enter their quotes and execute orders.
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