NASDAQ
NASDAQ (National Association of Securities Dealers Automated Quotations) is the second-largest U.S. stock exchange by market capitalization and the world's first fully electronic stock market, known for listing many of America's leading technology companies. It operates as an electronic communication network rather than a physical trading floor.
NASDAQ was founded in 1971 by the National Association of Securities Dealers (NASD), the predecessor to FINRA, as the world's first computerized trading system for over-the-counter securities. Its fully electronic architecture was revolutionary at the time, enabling faster and more efficient price discovery compared to traditional floor-based exchanges. Today, NASDAQ is home to some of the most valuable companies in the world, including Apple, Microsoft, Amazon, Alphabet (Google), Meta Platforms, and Tesla.
Unlike the NYSE, which retains designated market makers on a physical floor, NASDAQ operates entirely through a network of competing market makers — broker-dealers who post continuous bid and ask prices for the securities they cover. This competitive dealer model was designed to tighten spreads and improve pricing for investors. FINRA oversees broker-dealer conduct on NASDAQ, while the SEC provides broader regulatory oversight of the exchange itself.
The NASDAQ stock market is segmented into three tiers: the NASDAQ Global Select Market (the most prestigious, with the strictest listing standards), the NASDAQ Global Market, and the NASDAQ Capital Market (designed for smaller-cap companies). A company's tier determines the financial and governance thresholds it must maintain to remain listed. During the dot-com bubble of the late 1990s and early 2000s, NASDAQ listing standards became a subject of scrutiny as many technology companies with no earnings and minimal revenue achieved multi-billion dollar valuations before collapsing in 2000-2001.
NASDAQ's regular trading session also runs from 9:30 a.m. to 4:00 p.m. Eastern Time. Like the NYSE, NASDAQ offers pre-market and after-hours trading sessions, though liquidity is generally lower outside regular hours. The NASDAQ market is closely followed by investors worldwide, and its performance is often used as a barometer of the U.S. technology sector. NASDAQ also operates the NASDAQ Composite Index and the NASDAQ-100, both widely tracked benchmarks.
For educational purposes, it is worth noting that while NASDAQ is strongly associated with technology, it lists companies across virtually all industries. Many biotech, financial, and consumer companies also trade on NASDAQ. The exchange's brand has become synonymous with innovation-driven growth companies, and a NASDAQ listing is often pursued by high-growth firms seeking access to the deep capital pool of U.S. equity markets.