Live in USA
Back in 1971, NASDAQ stood for National Association of Securities Dealers
Automated Quotations.3 NASDAQ was founded in 19714 by the National Association
of Securities Dealers (NASD), who divested themselves of it in a series of sales
in 2000 and 2001. It is owned and operated by the NASDAQ OMX Group, the stocks
of which was listed on its own stock exchange beginning July 2, 2002, under the
ticker symbol NDAQ. It is regulated by the Financial Industry Regulatory
Authority (FINRA), the successor to the NASD.
When the NASDAQ began trading on February 8, 1971, it was the world's first electronic stock market. At first, it was merely a quotation system and did not give a way to actually do electronic trades.5 The NASDAQ helped lower the spread (the difference between the bid price and the ask price of the stock) but was unpopular among brokerages which made much of their money on the spread.
NASDAQ was the successor to the over-the-counter (OTC) system of trading. As late as 1987, the NASDAQ exchange was still commonly referred to as the OTC in media and also in the monthly Stock Guides issued by Standard & Poor's Corporation.
Over the years, NASDAQ became more of a stock market by adding trade and volume reporting and automated trading systems. NASDAQ was also the first stock market in the United States to start trading online, highlighting NASDAQ-traded companies (usually in technology) and closing with the declaration that NASDAQ is "the stock market for the next hundred years." Its main index is the NASDAQ Composite, which has been published since its inception. However, its exchange-traded fund tracks the large-cap NASDAQ-100 index, which was introduced in 1985 alongside the NASDAQ 100 Financial Index.
Until 1987, most trading occurred via the telephone, but during the October 1987 stock market crash, market makers often didn't answer their phones. To counteract this, the Small Order Execution System (SOES) was established, which provides an electronic method for dealers to enter their trades. NASDAQ requires market makers to honor trades over SOES.
In 1992, it joined with the London Stock Exchange to form the first intercontinental linkage of securities markets. NASD spun off NASDAQ in 2000 to form a publicly traded company, the NASDAQ Stock Market, Inc.
In 2006, NASDAQ changed from stock market to licensed national securities exchange.6
On November 8, 2007, NASDAQ bought the Philadelphia Stock Exchange (PHLX) for US$652 million. PHLX is the oldest stock exchange in America¡ªhaving been in operation since 1790.
To qualify for listing on the exchange, a company must be registered with the United States Securities and Exchange Commission (SEC), have at least three market makers (financial firms that act as brokers or dealers for specific securities) and meet minimum requirements for assets, capital, public shares, and shareholders.
In February 2011, in the wake of an announced merger of NYSE Euronext with Deutsche Börse, speculation developed that Nasdaq and IntercontinentalExchange (ICE) could mount a counter-bid of their own for NYSE. Nasdaq could be looking to acquire the American exchange's cash equities business, ICE the derivatives business. As of the time of the speculation, "NYSE Euronext¡¯s market value was $9.75 billion. Nasdaq was valued at $5.78 billion, while ICE was valued at $9.45 billion."7 Late in the month, Nasdaq was reported to be considering asking either ICE or the Chicago Merc to join in what would probably have to be, if it proceeded, an $11¨C12 billion counterbid.8
The European Association of Securities Dealers Automatic Quotation System (EASDAQ) was founded originally as a European equivalent to NASDAQ. It was purchased by NASDAQ in 2001 and became NASDAQ Europe, but operations were shut down as a result of the burst of the dot-com bubble. In 2007, NASDAQ Europe was revived as Equiduct and is currently operating under Börse Berlin. Download