The National-Association-of-Securities-Dealers-Automated-Quotations (NASDAQ) represents an electronically-based stock exchange comprising over 3,300 company members. The NASDAQ was created during 1971 by becoming the first global electronic-stock-exchange. The primary mission of the NASDAQ was to augment the manual trading transactions of stocks. Traditional exchanges were struggling to fulfill that requirement at that time.
A need arose between 1982 and 1986 for the larger corporate members of NASDAQ to separate themselves from smaller players. This requirement caused the exchange to separate into two divisions called the Small Cap and the National Market. By the 1990s, the concept behind the creation of the NASDAQ had proved so successful that it surpassed the trading volumes of the New York Stock Exchange (NYSE). Shortly afterwards, the NASDAQ amalgamated with the American-Stock-Exchange to form the NASDAQ-AMEX-Market-Group. Although the two exchanges still operated on an independent basis, they provided stiffer competition for the NYSE as a combined unit.
Presently, the NASDAQ conducts the largest trading volume in the USA performing almost 1.8 billion transactions daily. Although its members are quite diverse, NASDAQ has acquired a reputation for listing new, high-tech stocks. One of the primary reasons for this development is that the NASDAQ’s fee structure is less expensive than that of the NYSE. The NASDAQ now functions as a publically owned enterprise and trades its own shares under the ticker symbol NDAQ.
The NASDAQ does not possess a physical trading space as it is a fully electronic exchange. All trades are conducted using an advanced computerized trading platform. The NASDAQ services a dealers’ environment inferring that traders and brokers sell and purchase stocks utilizing a market maker instead of from one another. A firm’s stocks must comply with specified criteria in order to be listed on the NASDAQ. For example, the total worth of distributed shares must exceed $1.1 million and the price of each share must be at least $1. If smaller firms are unable to match this specification, then they can still be listed on the NASDAQ-Small-Caps-Market. As the fortunes of companies fluctuate, NASDAQ transfers them from its Small Caps to its National Market exchanges accordingly.