Some time ago, Finex explained about the market index.
The function of market indices is to track the performance of a particular group of stocks, bonds, or other investments.
Many investors use market indices to manage their investment portfolios and to keep up with updates around financial markets. Indices give investors a simple overview of a large market sector, without having to examine each asset individually.
This time Finex will explain one of the stock market indices named Nasdaq-100.
Trade with technical analysis and fundamental analysis.
History of the Nasdaq
NASDAQ stands for National Association of Securities Dealers Automated Quotations, originally.
Nasdaq was formerly a subsidiary of the National Association of Securities Dealers (NASD) which is now known as the Financial Industry Regulatory Authority (FINRA). Nasdaq stood alone after the Securities and Exchange Commission (SEC) urged NASD to automate the market for unlisted securities. As a result, Nasdaq as the first electronic trading system opened on February 8, 1971.
These entities provide automated information about share prices that investors can use to trade shares on other exchanges. Nasdaq developed into the world’s first electronic stock market, taking over transactions for stocks that were previously traded in places other than the formal stock exchange.
Until now, Nasdaq had formal listing requirements that companies had to meet in order to list their shares on the stock exchange. Today, Nasdaq has become the largest global exchange that relies on electronic transactions.
Many of the world’s largest businesses, including more than 3,700 companies, list their shares on the Nasdaq. Partly because of the way Nasdaq innovated technology in its trading platform, which in turn was able to attract many of the world’s leading tech 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 Nasd 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. This index includes companies from various industries except for the financial industry, such as commercial banks and investment banks. Non-financial sectors include retail, biotechnology, industry, technology, and healthcare.
The Nasdaq-100 is built on a modified capitalization methodology. This modified method uses the individual weights of the included items according to their market capitalization. Weighting allows for 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 composition of the index on a quarterly basis and adjusts the weights if distribution requirements are not met.
How to Trade Nasdaq-100
The Nasdaq-100 is traded through the 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 newly public companies that have very high market capitalizations.
Thanks to the combined performance tracking data of various companies and various investments, investing funds based on leading indices are considered the best way to make this type of investment fast, easy and inexpensive.
You can invest in the Nasdaq index with Finex. Just by signing up for a Pro account, you will get the opportunity to invest in Nasdaq and 6 other special indices.
Now is the time to make a profit by opening an account at 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.
Let’s trade with Finex.
