NASDAQ is the abbreviation for National Association of Securities Dealers Automated Quotations Agency. NASDAQ was established in 1971 by the National Association of Securities Dealers (NASD). NASDAQ is possessed and controlled by the NASDAQ Stock Market Incorporation, whose stock was listed on its own stock exchange in the 2002financial year. It has the largest electronic screen-based market equity securities market in America. NASDAQ has approximately 3,200 companies, and the trade average in NASDAQ is higher than any other American market.

History of NASDAQ

NASDAQ began its operations on Feb. 8, 1971. It was the world’s first electronic market. Initially, NASDAQ was simply a computer bulletin board system which never connected buyers and sellers. NASDAQ was of the utmost help in lowering the spread, which is essentially the gap between the bid price and the asking price of a particular stock. To date, NASDAQ is largely unpopular among brokers, as they used to make much of their money in the spread. In the years that followed, NASDAQ added trade and volume reporting along with an automated trade system. This helped put it on a par with other stock exchanges. Subsequently, NASDAQ became the first stock market company to market itself to the general public. It listed the top NASDAQ trading companies and declared itself to be the stock market of the United States for the next 100 years. The main index of NASDAQ is NASDAQ composite, which has been published since the time of its inception. Until the 1987 financial year, most trading was done via telephone. In 1987, when the stock market crashed, most stock traders didn’t respond to phone calls. This caused the establishment of the Small Order Execution System (SOES). SOES helps in the facilitation of trade through electronic methods.


NASDAQ helps encourage trading among an inexhaustible number of market players. NASDAQ market structures are such that they offer an environment that facilitates greater liquidity. This is indicative of the fact that without dramatic changes in price, stocks can be easily brought or sold. NASDAQ is a standing example of what a stock market needs to be and what it can become.