What Makes Up the NASDAQ?

by Ron White

The state of the economy often focuses on matters pertaining to Wall Street, where individuals and companies buy and sell stocks throughout the week, sinking billions of dollars into all sorts of investments. NASDAQ plays a prominent role in this effort. NASDAQ is an international exchange market in which investors buy and sell stocks. NASDAQ also refers to a popular index that many use to measure the market and general state of the economy. The index features all of the companies that trade on the market. Only certain companies make up the NASDAQ marketplace.

NASDAQ Exchange

NASDAQ, on one level, refers to an electronic stock exchange. The exchange does not have a physical trading floor. Instead, it offers stocks solely through a computer and telecommunication system. Created in 1971, NASDAQ allows buyers and sellers to exchange stocks electronically. NASDAQ stands for the National Association of Securities Dealers Automated Quotations. On average, daily stock volume on NASDAQ totals 1.8 billion trades.

NASDAQ Company Qualifications

To sell stock on the NASDAQ market, companies must pay a listing fee. The fee varies based on certain factors, and the maximum fee is $150,000. Companies also must meet certain financial criteria. This includes maintaining a stock price of at least $1. If the company’s stock falls below that price, NASDAQ removes the stock from its listings and from its index. A company also must possess a total value of outstanding stocks of at least $1.1 million to remain on the NASDAQ exchange. NASDAQ features a small-cap market for companies that cannot meet the financial criteria for its large-cap stock market. When a company loses eligibility for the large-cap market, it moves the company to the small-cap trading market. If a small-cap company meets financial criteria, it moves to the large-cap market.

NASDAQ Numbers

The number of companies trading on the NASDAQ Composite market totaled 2,833 in as of the time of publication. The number of companies trading on all of NASDAQ's markets totaled 3,600. The number of companies fluctuates as new companies enter the market and some companies cease operations. The large-cap companies generally include some of the top companies in the United States and some top international companies. Apple Inc., Google Inc., Intel Corp. and Mattel Inc. trade on NASDAQ. Some large companies, though, do not trade on NASDAQ. They prefer to trade only on the New York Stock Exchange. An example is Wal-Mart Stores, Inc.

NASDAQ 100 Index

The NASDAQ index is a measure of stock value. The index represents the value of one share of stock from all of the companies trading in the NASDAQ market. The media and investors use this index to gauge the general performance of stocks. NASDAQ also features a special index, called the NASDAQ 100. This index includes only 100 of the largest domestic and international non-financial securities companies. NASDAQ bases its list on market capitalization, which is a measure of the total value of outstanding stock shares.

About the Author

Based in Central Florida, Ron White has worked as professional journalist since 2001. He specializes in sports and business. White started his career as a sportswriter and later worked as associate editor for Maintenance Sales News and as the assistant editor for "The Observer," a daily newspaper based in New Smyrna Beach, Fla. White has written more than 2,000 news and sports stories for newspapers and websites. He holds a Bachelor of Arts degree in journalism from Eastern Illinois University.

Photo Credits

  • Thomas Lohnes/Getty Images News/Getty Images