NASDAQ Stock History A Major Success Story
It is the largest stock exchange in the world based on the trading volume and has nearly 4000 corporations and companies registered with it. The NASDAQ stock history proves to be a very fascinating subject to study for economists and financial experts worldwide.
The NASDAQ, the New York Stock Exchange and the American Stock Exchange are the three major stock exchanges in the United States. A stock exchange is an organization which is established to enhance the trade of stocks and securities among traders and brokers. Today, NASDAQ is a major player in the world stock market and handles a large portion of the exchange traded funds business. It is renown as the first electronic market in the world. One of the initial targets of NASDAQ was to minimize the gap between the ask price and bid price of the stock. Obviously, it created unfavorable impressions amongst brokerages.
The Securities and Exchange Commission (SEC) was authorized by the US Congress in 1961 to research on the trading difficulty encountered in over-the-counter securities (OTC). The research concluded that to improve the trading in OTC securities, automation was essential. Therefore, the National Association of Securities Dealers Automated Quotations or the NASDAQ was established in 1971 to implement the results of this research. Initially, the NASDAQ was referred to as the OTC, owing to its basic principles
At first, NASDAQ didn’t have a standard index. But in 1985, NASDAQ-100 was accepted as an index based on market capitalization standards. The norms set by the New York Stock Exchange were found to be unacceptable by many technology based companies. Thus, these companies selected NASDAQ as their stock market. Many major players including Apple, Microsoft and Cisco registered with NASDAQ.
NASDAQ was established with a view to eliminate trading difficulty encountered in over-the-counter securities. But in 2002, NASDAQ separated from NASD by purchasing a major part of the share. Owing to certain market conditions, NASDAQ had to resort to its basic policy in 2005.
On January 13, 2006, NASDAQ received the much awaited approval from the Securities and Exchange Commission (SEC), thereby declaring it as a national securities exchange. Today, NASDAQ is a self-regulatory organization making and amending rules to create the best trading efforts for its companies.
NASDAQ has been on the path of diversification and expansion ever since. It purchased the Philadelphia Stock Exchange in November 8, 2007. But, its venture to purchase the London Stock Exchange (LSE) resulted in a failure since the stock holders clearly disapproved of this acquisition.
Today, NASDAQ is the largest electronic stock market in the United States. It handles more share trades than the New York Stock Exchange. Therefore, it is very interesting to study the NASDAQ stock history since it gives a clear insight to the massive achievement made by this organization over the years.
