The NASDAQ 100 is an online stock exchange market where listed and unlisted companies are traded. The names of companies on NASDAQ are determined by a round robin system. A company is assigned a numerical value ranging from one to ten, with one representing the smallest share in terms of total share value and the latter being the largest in terms of overall value.
Low cost, quick and easily accessible trading information to traders and investors
The main difference between NASDAQ and other stock markets is that listed companies do not file public reports with the Securities and Exchange Commission, unlike corporations that are required to do so. Companies listed on NASDAQ are permitted to trade throughout the day, whereas in other stock markets trading hours are daily. The primary objective of NASDAQ is to provide low cost, quick and easily accessible trading information to traders and investors.
Discount market maker liquidity group and the national discount market
Investing in the NASDAQ means paying a commission for trades and transactions made by brokers. The fees vary according to the type of transaction chosen, with fees for orders, sales and purchases being the most common. The commission rate is based on the minimum bid price, which is higher than the standard charge for an order in stocks. The two primary sources of liquidity in the Nasdaq are the discount market maker liquidity group and the national discount market.
In addition to the standard list of stocks, the Nasdaq 100 also includes common stocks, preferred stocks, option stocks, security stocks, growth stocks and specialty stocks. There are four major categories of stocks that are traded on the Nasdaq. These categories are equity value, gain income, financial-risk and growth. Equity value is the purchase price per share (PPS) of the corporation divided by its current market price per share. Financial risk is the maximum amount that could be lost in the event of the corporation’s bankruptcy or inability to raise capital.
QDAQ system
Price quotation in the Nasdaq 100 index is determined by the closing price of the corporation’s securities on the over-the-counter market, as quoted by the NASDAQ Capital Market. Trading on Nasdaq is done via Nasdaq listings, which are standardized from the start. Before investors can begin buying and selling on Nasdaq they must first establish a trading account. Once this account is established investors can begin trading through the QDAQ system.
Faster movement of prices and more direct trading
The Nasdaq 100 index is composed of fifty different categories of securities, which include common stocks, preferred stocks, option stocks, security stocks and growth stocks. The inclusion of these securities in the Nasdaq 100 index permits faster movement of prices and more direct trading. For example, if one company wants to raise capital and needs to raise money quickly they may list their stock on Nasdaq and immediately receive a secondary market capitalization.
Investors need to understand that, unlike the NYSE, there are no commissions or additional charges involved with Nasdaq listed securities. Investors are free to buy and sell as much or as little as they want once they have established a trading account. It is important to remember however, that selling securities in the Nasdaq 100 index does not protect you from any losses due to the inability to purchase when you need to. There are special funds and other types of investment opportunities available to provide this protection to you as an investor.
