The second-largest stock exchange in the world is the NASDAQ. The NASDAQ has over 3,700 public companies listed for trading, with a market capitalisation of over $19 trillion—just shy of the $25.5 trillion listed market cap of the New York Stock Exchange (NYSE). The NASDAQ gained notoriety as the first entirely electronic exchange, and numerous top tech firms continue to favour it.
It includes many of the biggest names in the world, like Amazon, Microsoft, Facebook, Apple, Starbucks, and Tesla, and is known for drawing cutting-edge businesses and industry upstarts. Thanks to Stockal, how to invest in NASDAQ from India is no longer an issue for investors. You can now easily trade or invest in the NASDAQ market as an Indian investor.
However, the big question is, what makes NASDAQ so unique? And why should you invest in it? Let’s get answers to your queries right away!
What Is NASDAQ?
National Association of Securities Dealers Automated Quotations is known by the abbreviation NASDAQ. The NASDAQ Composite, one of its indexes with more than 3,000 stocks, is now referred to by this name. NASDAQ also refers to the exchange itself, the NASDAQ Stock Market LLC, a subsidiary of NASDAQ Inc. The company also owns seven European exchanges, in addition to the Boston Stock Exchange, Philadelphia Stock Exchange, and others.
The NASDAQ trading platform began operations in 1971 as an electronic quotation system for share prices before developing into the world’s first fully electronic stock market, where transactions take place over a computerised network rather than on a physical trading floor.
The Significance of the NASDAQ
Before the NASDAQ, stock exchanges were physical locations with trading floors where participants gathered to buy and sell securities. These exchanges relied on employees who handled stock trading duties on the trading floor.
With the use of a computer network for buying and selling, the NASDAQ created a substitute. The speed at which investors could buy and sell increased as a result of this transformation of trading. Electronic trading is commonplace today. Even the NYSE, renowned for having shouting brokers haggling orders with hand signals on its trading floor, has largely shifted to electronic trading.
Market makers, traders or dealers whose job is to maintain efficient trading, facilitate trading regardless of where it occurs. The NASDAQ uses broker-dealer members, who keep their own stock supply and buy and sell to individuals and other dealers from their inventory. They ensure markets remain liquid by buying when others are selling and selling when others are buying, regardless of whether they are referred to as specialists or dealers.
The NASDAQ has always used a quotation system that enables dealer networks to facilitate over-the-counter (OTC) securities trading away from official exchanges. The NASDAQ was initially referred to as an OTC market. Today, it trades both listed and OTC stocks. It was the first exchange to offer online trading after it added automated trading systems that could generate trade and volume reports. Additionally, it was the first exchange to introduce a website and start storing data in the cloud.
5 Reasons for Investing in the NASDAQ Stock Market
Investors who like innovation, technology stocks, and the newest growth theme should go to the NASDAQ market. It gives the companies listed there a greater sense of importance and gives investors the chance to acquire stock in a promising company.
Let’s see why investors should invest in the famous NASDAQ stock market.
1. NASDAQ’s growth
2 billion shares were traded in 1971; today, 66.5 billion shares are traded annually, exceeding the NYSE’s annual volume by a margin of 54%.
The NASDAQ has recently performed very well because it is heavily focused on technology. As of March 19, 2021, the 10-year performance of the NASDAQ 100 Index is 552.24 per cent, and the 10-year performance of the NASDAQ Composite Index is 444.12 per cent.
The NASDAQ has outperformed other significant indexes during that time period, such as the S&P 500, which only saw a return of 257.22%.
2. The continuously advancements
NASDAQ is a market that continuously evaluates itself and makes improvements, incorporating the best elements of both its own and the exchange systems. NASDAQ is a sizable electronic network created to promote a more open and lively stock market. When NASDAQ started, it was one of a kind, and they are still religiously upgrading themselves.
3. Access to interesting equities & liquidity
With companies from various industries and areas, NASDAQ stocks are incredibly interesting and diverse. You can also access the stocks and investments of numerous international nations through it.
NASDAQ-listed stocks typically have a lot of liquidity, making this a more active trading environment than NYSE-listed companies.
4. Big-Names Started Small
Buying stock early is the key to making significant gains. High-growth companies with exponential potential make up many NASDAQ stocks. While there are a lot of big companies like Alphabet, Amazon and Tesla listed on the NASDAQ; there are also some companies that are small as of now but that have huge potential. Such stocks are great, especially when you are investing for the long term and expect huge returns.
5. A Broad Mix of Stocks
The NASDAQ includes firms of all sizes, from micro-caps to mega-caps. There is also a variation in the types of stocks listed on the NASDAQ. However, most of them are high-tech companies only.
NASDAQ will enable you to outperform the competition regarding long-term investment returns. Price fluctuations are constant, but the stock market is the best place to put your money to good use. To earn better returns in the future, proceed with investing in stocks listed on the NASDAQ exchange.
Among all the other benefits, the best thing about these stocks is that almost all of them have high growth potential and innovation. One thing that every investor wants is great returns, and these stocks give just that.
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